PETALING JAYA: Asian markets got roasted as they heralded the “Year of the Rooster”.
They witnessed a selldown across asset classes on the first day of trading after the Chinese New Year (CNY) break, as investors turned bearish on US president Donald Trump’s immigration ban and the dismissal of the US acting attorney-general.
The MSCI Asia Pacific Index fell 0.8% for its biggest one-day decline since December. Japan’s Nikkei 225 led the losers with a 1.69% decline as Asian markets were broadly in the red.
The FBM KLCI was the second-worst-performing index in the region.
Having resumed trading following the CNY break, the FBM KLCI reported a substantial decline of 14.82 points due to last-minute selling of the bourse’s blue-chip stocks.
“The market was dragged down by heavy selling of Sime Darby Bhd, which had hit an eight-year high last Friday,” said a trader.
The feel-good factor following Trump’s win last November seemed to have dissipated due to the president’s recent spate of executive orders that were viewed as the US adopting “protectionist” trade policies.
Bursa Malaysia has lost almost all the gains it made after Trump won the US election on Nov 8 last year.
Year-to-date, the FBM KLCI is up a meagre 0.46%.
Apart from the immigration ban of refugees from seven Muslim-majority nations, the president on Monday sacked US acting attorney-general Sally Yates for refusing to defend the new immigration policy, which had sparked fears of further isolationist measures by the United States.
During the last trading day of January, gold advanced for the fourth consecutive session in a reflection of souring investor sentiment.
Crude oil headed for its first monthly decline in three months despite the Brent crude remaining stable at around US$55 per barrel.
The index closed at 1,671.54 points, or a 1.4% decline in two trading sessions.
Total turnover amounted to 1.15 billion shares, while total value was relatively high at RM1.6bil.
The Malaysian bourse had rallied last week ahead of the Chinese lunar new year holidays, a period which typically sees strong inflows and buying interest.
MIDF Research said in a report yesterday that Bursa’s net inflows last week amounted to RM110.3mil, offsetting a significant portion of the RM143mil in net outflows recorded the week before.
“Of significance to the local market is that the foreign participation rate held up pretty well.
However, overall sentiment towards South-East Asian emerging markets remained tempered, as investors adopt a ‘wait-and-see’ approach to the current global economic and political climate,” it pointed out.
Among the FBM KLCI’s components, Sime was the biggest decliner in percentage terms.
The stock fell 32 sen to RM8.91 following a late wave of selling just before the close, or a 3.5% decline.
It had risen to its highest in eight years last Friday after the conglomerate confirmed it was looking into demerging its various business operations.
Financial stocks also fell heavily, with all seven banking stocks in the FBM KLCI reporting declines.
Among them, RHB Bank Bhd fell 12 sen to RM4.90, while AmBank Bhd fell four sen to RM4.58.
In another development, the dollar’s recent decline had propped up the ringgit against the greenback.
The ringgit continued to strengthen to RM4.4285 for a new high this year, compared with RM4.4303 on Monday.