KUALA LUMPUR, Aug 3 — Gloomy global economic sentiment which has led to weaker growth, coupled with a protracted trade dispute between the US and China has taken the shine off on Bursa Malaysia.

As the local bourse continues its losing streak for the third consecutive week, analysts are expecting the benchmark FBM KLCI to trade cautiously next week, ranging between 1,620 to 1,640.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said there is a high possibility the local bourse could be extending its losses next week due to lack of local catalysts.

"However, as the market is currently at a low level due to overselling, there may be a technical rebound and bargain hunting in between the week, buying on weaknesses especially in the banking stocks,” he told Bernama.

Pong said that as the current market situation remained cloudy due to global economic volatility, investors are shifting to a more stable investment such as real estate investment trusts (REITs).

The 25 basis point cut by the US Federal Reserve’s Federal Open Market Committee (FOMC) has taken a toll on the local financial index, slumping 353.08 points over the week to 15,964.87 on a Friday to Friday basis.

VM Markets Pte Ltd managing partner Stephen Innes said the US interest rate cut has caused investors to second guess Asia’s emerging markets equity strategy.

"Tagged together with the escalation in tariffs which has sent the market reeling as this hits at the heart of the regional growth markets, investors would be more cautious before putting their money in,” he said.

Meanwhile, the trade dispute between Washington and Beijing rages on when US President Donald Trump on Thursday slapped additional tariffs on Chinese goods including smart-phones, laptop computers and children’s clothing starting September 1, 2019.

Beijing has pledged retaliatory measures if the US continues to pile more tariffs to the remainder on its exports.

On a Friday to Friday basis, the FBM KLCI index erased 21.20 points to 1,626.76 from 1,647.96 last week.

Trading in the week was heavily influenced by the Wall Street performance, on negotiation between the US and China on their trade disputes, as well as the US FOMC meeting on interest rate decision.

The FBM Emas Index declined 181.63 points to 11,516.79, the FBMT 100 Index depreciated 174.66 points to 11,345.00 and the FBM Emas Shariah Index trimmed 133.97 points to 11,926.52.

The FBM 70 weakened 331.66 points to 14,356.22 and the FBM Ace Index shed 75.43 points to 4,689.34.

Sector-wise, the Financial Services Index slid 353.08 points to 15,964.87, the Plantation Index dipped 89.46 points to 6,689.17 and the Industrial Products and Services Index inched down 1.57 points to 154.22.

Weekly turnover fell to 10.06 billion units valued at RM8.25 billion versus 13.96 billion units worth RM9.90 billion last week.

Main Market volume decreased to 6.40 billion shares worth RM7.55 billion against 9.25 billion shares valued at RM9 billion.

Warrants turnover slid to 1.92 billion units valued at RM416.16 million versus 2.36 billion units worth RM486 million.

The ACE Market volume fell to 1.72 billion shares valued at RM264.95 billion from 2.34 billion shares valued at RM411.64 billion.

The local bourse and its subsidiaries were closed on July 30 in conjunction with the installation of Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah as the country’s 16th Yang di-Pertuan Agong. — Bernama