KLCI falls as ringgit weakens past 4 to US$

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KUALA LUMPUR: China’s move to allow the yuan to fall for the second day sent the ringgit past the crucial 4.0 level to the US dollar while the FBM KLCI fell more than 23 points at midday on Wednesday in line with the sharp falls in key Asian markets

At 12.30pm, the KLCI was down 23.23 points or 1.42% to 1,613.48. Turnover was 1.24 billion shares valued at RM913.56mil. Declining stocks hammered advancers 860 to 81 while 161 stocks were unchanged.

The ringgit fell to the lowest since 1998 at 4.0275 to the greenback and it is 12.94% down year-to-date and the worst performing currency in Asia. Reuters reported emerging Asian currencies fell to multi-year lows on Wednesday after China’s central bank allowed the yuan to drop for the second straight day to a four-year trough, a move sparking fears of a global currency war.

The yuan fell to as low as 6.4301 per dollar, its lowest since August 2011, after the People’s Bank of China weakened its daily yuan midpoint by 1.6%. At Bursa Malaysia, which had already been battered by domestic uncertainties, weak oil price and slump in the commodities, coupled with the selldown by foreign funds, seen nearing the psychologically important 1,600.

Banks were the major drags on the KLCI, with Public Bank down 52 sen to RM18.20 and erased 3.38 points from the KLCI, Hong Leong Bank fell 38 sen to RM12.80, CIMB 11 sen to RM4.94 and Maybank 10 sen to RM8.42. Crude palm oil for third-month delivery fell RM18 to RM2,022 per tonne. Sime Darby and KL Kepong lost six sen each to RM8.10 and RM21.42, IOI Corp fell four sen to RM4.01 while PPB Group was unchanged at RM15.30. Tenaga lost 16 sen to RM10.84, and Genting Malaysia 16 sen also to RM3.81. US light crude oil fell 19 cents to US$42.89 and Brent was down 34 cents to US$48.84. Petronas Gas and Petronas Dagangan lost eight sen each to RM20.50 and RM21.50 but Petronas Chemicals added one sen to RM5.99.

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