KLCI pares gains, energy stocks stay in focus

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KUALA LUMPUR (Sept 17): The FBM KLCI pared some of its gains at mid-morning today but remained above the 1,600 level as energy stocks stayed in focus following the weekend drone attacks on Aramco's facilities in Saudi Arabia.

At 10am, the FBM KLCI was up 0.93 points to 1,602.18. The index had earlier risen to a high of 1,609.97.

Losers overtook gainers by 266 to 260, while 309 counters traded unchanged. Volume was 937.77 million shares valued at RM426.85 million.

The gainers included Petronas Dagangan Bhd, Hengyuan Refining Co Bhd, Petronas Gas Bhd, Petronas Chemicals Group Bhd, Petron Malaysia Refining & Marketing Bhd, Hong Leong Industries Bhd, MISC Bhd and Magni-Tech Industries Bhd.

The actives included Sapura Energy Bhd, Bumi Armada Bhd, KNM Group Bhd, MNC Wireless Bhd, Hibiscus Petroleum Bhd and Green Packet Bhd.

The decliners included British American Tobacco (M) Bhd, Nestle (M) Bhd, Dutch Lady Milk Industries Bhd, PPB Group Bhd and UEM Edgenta Bhd.

Oil futures shed some of their massive gains on Tuesday as the United States flagged the possible release of crude reserves, but the threat of military action over the attacks on Saudi oil facilities kept prices elevated and stocks under pressure, according to Reuters.

While equity market losses have not been large, the shaky investor confidence continues to support safe-haven assets, with gold edging higher on Tuesday and Treasury prices rising, it said.

Hong Leong IB Research said given the rise in geopolitical tension amid the protracted trade war environment, the performance on Wall Street may turn slightly negative after a good run on the Dow in the past weeks.

"Also, investors will focus mainly on energy sector for the time being as the crude oil rally may sustain for a while until the damaged production facilities is restarted in Saudi Arabia. In the meantime, traders will monitor the outcome of the FOMC (Federal Open Market Committee) meeting this week.

"With the drone attacks on Saudi's oil production facilities over the weekend, which caused oil [prices to] spike yesterday, we anticipate trading tone to turn negative on broader market.

"However, selected segment under the O&G (oil and gas) sector like E&P (exploration and production) may expect higher trading interest for the near term. Still, the KLCI may trend within the range of 1,580-1,620," it said.