Commodity Stocks Face Headwinds

Commodities-related stocks are expected to encounter some headwinds today with the heightened volatility between the global currencies

Commodity Stocks Face Headwinds
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The FBM KLCI closed lower or almost a 3-month low due to continuous selling by foreign funds amid regional weaknesses.

"Though the local bourse is in oversold territory, sentiment has turned cautious thus we expect limited upside for local equities and see the index to hover within the 1,405- 1,420 range today.

"We expect commodities related stocks to encounter some headwinds today with the heightened volatility between the global currencies. Meanwhile, the Brent crude price has slipped to US$84/barrel on recessionary fears," says Rakuten Trade.

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Local Market Headwinds

FBM KLCI continued with its downtrend for the fourth consecutive day, amid the weak regional performance.

The benchmark index lost 0.84% or 11.94 points to 1,413.04 with losers led by KLK, PETGAS and HLBANK. Market breadth was negative with 780 losers against 164 gainers. Total volume stood at 2.12bn shares valued at RM1.85bn.

Key regional markets closed broadly lower yesterday. Nikkei 225 and STI slid 2.66% and 1.27% to end at 26,431.55 and 3,185.96 respectively. Meanwhile, HSI and SHCOMP fell by 0.44% and 1.20% to end at 17,855.14 and 3,051.23 respectively.

Wall Street continue with its decline as all 3 major indices closed steeply lower on rising US yields and turmoil amongst global currencies. The DJI Average was down 330 points while the Nasdaq lost 65 points as the US 10-year yield breached the 3.9% level which is a 12 year high.

Wall Street closed lower yesterday. The DJIA slumped 1.11% to close at 29,260.81. S&P500 and Nasdaq dropped 1.03% and 0.60% to end at 3,655.04 and 10,802.92 respectively.