THE FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract on Bursa Malaysia Derivatives is expected to trade on a bearish trend next week amid mounting concerns over the Covid-19, recession scare and lower oil price.
The pandamic declaration by the World Health Organisation (WHO) on Thursday spooked the global stock markets with the Dow Jones Industrial Average nosedived 2,352.6 points, or 9.99%, to 21,200.62, the S&P 500 lost 260.74 points or 9.51 per cent to 2,480.64, and the Nasdaq Composite dropped 750.25 points, or 9.43%, to 7,201.80. The S&P 500 Energy index lost 12.3%.
It was the worse day since the 1987 stock market crash.
Malacca Securities Sdn Bhd, in a note, said Malaysian stocks succumbed to selling pressure stemmed by the WHO’s move to declare Covid-19 a pandemic.
“Following the move, the odds of global recession have also jumped above the 50% level (from 25% level recorded since the start of the year), triggering fears that the contagion effect may be felt across the globe,” it said.
The research house said a rebound may not be forthcoming as investor sentiment remains frail.
Foreign selling remains unabated, thus increasing the selling pressure on the index heavyweights, with the trend likely to persist for longer, it added.
For next week, the FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to hover around 1,340 to 1,350.
On a Friday-to-Friday basis, spot month March 2020 decreased 139.5 points to 1,331.5, April 2020 declined 138.5 points to 1,329.50, June 2020 depreciated 142 points to 1,325, and September 2020 was 144.5 points weaker at 1,318.5.
Turnover increased to 94,657 lots from 53,157 lots last week, while the open interest widened to 57,696 contracts from 36,115 contracts previously.
On a Friday-to-Friday basis, the FBM KLCI gave up 74.68 points or 5.26 per cent to 1,344.75 from 1,483.10 previously. – March14, 2020, Bernama
