Regional markets suffer meltdown, FBM KLCI down 5.26pct

Regional equity markets, including Malaysia, took a thrashing on Friday the 13th as selling pressure intensified amid uncertainties due to Covid-19 that have triggered travel bans and a recession scare, coupled with lower oil prices.

At the close, the FBM KLCI erased 74.68 points or 5.26 percent to 1,344.75, the lowest level since 2010 with losers trouncing gainers 987 to 158.

After opening 55.67 points weaker at 1,4363.76 this morning, the local index moved between 1,320.96 and 1,369.00 throughout the day.

Turnover increased to 5.67 billion shares worth RM4.90 billion from 3.79 billion shares worth RM3.06 billion yesterday.

Almost all major stock markets in Asia tanked further and remained in bear territory.

Japan’s Nikkei was down 6.08 percent, Hong Kong’s Hang Seng slipped 1.14 percent and Singapore’s Straits Times shed 1.30 percent.

Throughout the week, there was RM3.4 billion worth of outflow compared with RM1.2 billion during a political turmoil in the country two weeks ago.

The US stock market index, Dow Jones Industrial Average nosedived 2,352.6 points, or 9.99 percent, to 21,200.62, the S&P 500 lost 260.74 points or 9.51 percent to 2,480.64 and the Nasdaq Composite dropped 750.25 points, or 9.43 percent, to 7,201.80. The S&P 500 Energy index lost 12.3 percent.

It was the worst day since 1987 and Friday’s outlook does not seem promising as well.

AxiCorp chief market strategist Stephen Innes said the global equities went into free-fall overnight after a series of communication blunders triggered pandemic pandemonium on global markets.

“In mere weeks the market has shifted gears from a transitory health scare to a full-blown global recession.

“The White House imposed travel bans and provided the match in the powder barrel. But the market had been rapidly moving into combustion mode all week after Italy severed connections with the rest of the world, closing all shops except for food stores, pharmacies and banks,” he said.

Innes added that the global supply chains are no longer just "disrupted" but are now in the process of shutting down completely.

“And even more worrisome is that the worst-case scenario and the sum of all fears are culminating with the view that policymakers remain well behind the curve,” he said.

The International Air Transport Association (IATA) asked governments to prepare for the adverse economic impact arising from travel bans as the industry employs some 2.7 million people and were already under extreme financial and operational pressures ever since the spread of Covid-19.

The dimensions of the US-Europe market are enormous, it said.

“In 2019, there was a total of around 200,000 flights scheduled between the US and Schengen Area (comprising 26 European states), equivalent to around 550 flights per day. There were around 46 million passengers (roughly equivalent to 125,000 travellers every day),” said IATA, which represents some 290 airlines, comprising 82 percent of global air traffic.

Among the heavyweights, the losers were led by Maybank, which declined 40 sen to RM7.88, Tenaga declined 60 sen to RM11.82, Public Bank dropped 90 sen to RM15.30 and IHH was 18 sen lower at RM5.38.

These counters contributed a combined 23.46 points to the losses in the composite index.

Of the actives, energy counters dominated the market, with Sapura Energy inched down half-a-sen to 10.5 sen, KNM slipped 1.5 sen to 12 sen and Velesto Energy was one sen weaker at 16 sen.

On the index board, the FBM Emas Index decreased 531.66 points to 9,326.41, the FBM 70 erased 672.47 points to 11,010.23 and the FBM Emas Shariah Index gave up 547.09 points to 9,984.99.

The FBMT 100 Index contracted 523.35 points to 9,218.96 and the FBM Ace declined 223.78 points to 4,291.99.

Sector-wise, the Industrial Products and Services Index inched down 8.77 points to 110.67, the Plantation Index gave up 373.04 points to 5,847.51 and the Financial Services Index was 752.73 points weaker at 12,822.34.

Main Market volume rose to 4.19 billion shares worth RM4.67 billion from 2.41 billion shares worth RM2.82 billion at yesterday's close.

Warrants turnover decreased to 528.18 million units worth RM69.99 million versus 532.27 million units valued at RM100.06 million.

Volume on the ACE Market increased to 949.21 million shares worth RM155.14 million compared with 841.67 million shares worth RM140.81 million.

Consumer products and services accounted for 493.08 million shares traded on the Main Market, industrial products and services (547.23 million), construction (412.63 million), technology (636.36 million), SPAC (nil), financial services (185.21 million), property (297.08 million), plantations (113.21 million), Reits (43.03 million), closed/fund (91,700), energy (1.14 billion), healthcare (99.43 million), telecommunications and media (74.80 million), transportation and logistics (73.97 million), and utilities (76.59 million).

- Bernama