(Jan 28): Malaysia's stock market continued its upward trend today, led by gains in blue chip stocks such as British American Tobacco (Malaysia) Bhd and Kuala Lumpur Kepong Bhd.
The FBM KLCI ended the day up 2.99 points or 0.18% at 1,634.53, even though market breadth was negative with 522 losers compared with 348 gainers.
According to JF Apex Securities Bhd, the benchmark index swung between gains and losses before finishing higher amid overnight losses in US market. Trading volume increased to 1.82 billion shares worth RM2.46 billion compared with yesterday's 1.62 billion shares worth RM1.65 billion.
The local market performance was, however, dragged down by telecommunication stocks, which reacted negatively to an announcement in the recalibrated Budget 2016 that the government intends to optimise revenue from the telecommunication spectrum through redistribution and bidding process, which will be implemented soon.
In a Jan 27 note on the telecommunications sector, RHB Research pointed to a risk to the potential move in that spectrum bids may go overboard.
"This can result in value destruction for the industry, as can be inferred from the recent Thai spectrum auctions," it added.
At closing bell, shares in Axiata Group Bhd were down 52 sen or 8.51% at RM5.59,Maxis Bhd shares fell 42 sen or 6.36% to RM6.18, while DiGi.Com Bhd 's stock was down 22 sen or 4.31% at RM4.88. They were among the top 10 losers on Bursa Malaysia today.
Other lagging movers were glove counters such as Kossan Rubber Industries Bhd, down 59 sen or 7.08% at RM7.74; Top Glove Corp Bhd , down 50 sen or 8.2% at RM5.60; and Supermax Corp Bhd down 22 sen or 7.03% at RM2.91.
"There's always an investor perception that when the ringgit strengthens, it's time to divest glove counters and vice versa, even though glove counters have come out to say that their financial performance is not solely dependent on the fluctuations in the currency," a bank-backed analyst told theedgemarkets.com.
The most actively traded counter was Xidelang Holdings Ltd with 103.9 million shares traded.
At press time, the ringgit strengthened by 1.1% to 4.2055 against the US dollar, from 4.2525 yesterday. Against the Singapore dollar, the ringgit also strengthened by 1% to trade at levels of 2.9471, from its close of 2.978 yesterday.
Regionally, Asian shares rose slightly in choppy trade today as investors attempted to interpret the US Federal Reserve's statement overnight and oil prices fell back after climbing in the previous session, according to Reuters.
Reuters reported that a bounce in oil prices also offered some salve to strained nerves in the Asia-Pacific region. While Brent crude was off 42 US cents at US$32.68 a barrel today, this followed a 4% jump on Wednesday, after Russia hinted at cooperation with OPEC on oversupply.
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