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Malaysia, Singapore shares slump amid dip in oil prices

Wall Street's fall, dollar's gain also weigh on overall investors sentiment

KUALA LUMPUR (Nikkei Markets) - Malaysia and Singapore shares slumped Friday marking a week of losses for both the markets, dragged lower by oil and gas stocks, while an overnight decline in U.S. equities weighed on overall sentiment in Asia.

The FBM KLCI ended 0.8% lower at 1708.09 with weekly loss of 0.3%. Petroleum shipping firm MISC fell 7.5% as oil prices declined for the fifth consecutive week. The Straits Times Index closed down 0.5% at 3077.97, finishing the week with a 1.2% drop. Offshore rigbuilder Keppel Corp lost 1.6%.

"Foreign investors may withdraw from the stock market after the Moody's ratings agency said Malaysia's fiscal position is weakening," said Sundararajah Ramasamy, head of dealing at M&A Securities. Malaysia's increasing reliance on oil revenue at a time of volatile oil prices is a cause for concern, he said.

The Nikkei Asia300 Index fell 1.8% after the U.S dollar index jumped 0.8% overnight and the yield on 10-year U.S. Treasury notes climbed. Overnight, the S&P 500 fell 0.3%, while the Nasdaq Composite was down 0.5%. Dow Jones Industrial Average was flat.

The U.S. Fed maintained its guidance on further gradual rate increases even as it stood pat on rates, as expected. The central bank is widely expected to increase rates for a fourth time this year at its December meeting.

Brent crude, meanwhile fell 0.3% to $70.45, adding to the 2% dip on Thursday, as increases in crude output from big producing countries fed concerns of oversupply.

"After the significant sell-off overnight, we could see profit taking to set in ahead despite the distinctly bearish overtone that is gripping oil markets." said OANDA Head of Asia Trading Stephen Innes.

Reach Energy and Hibiscus Petroleum, which own production assets, fell 1.2% and 2.6% respectively in Malaysia. Offshore and marine engineering firm Sembcorp Marine fell 1.8% in Singapore, while parent Sembcorp Industries fell 1.1%.

SATS declined 4.5%, the top loser on the Singapore benchmark, as the ground handler reported a 9% year-on-year decrease in second quarter net profit to $65.7 million on the absence of disposal gains and lower contributions from units.

In earnings news, semiconductor maker Malaysian Pacific Industries added 5.6% after reporting that net profit rose 16.7% on year in the fiscal first quarter. Software service company ECS ICT added 5.6% in Malaysia after posting a 56.9% rise in third-quarter net profit.

In Singapore, SIA Engineering Company lost 2.7% after the aircraft maintenance company posted a 1.6% decline on year in the second quarter net profit to S$38 million ($27.6 million), while revenue fell 8.5% to S$251.3 million.

Genting Singapore surged 6.7% after the resort operator posted a 46% on-year rise in 3Q net profit to S$210.4 million. City Developments edged 0.4% higher. The property developer reported Thursday that 3Q net profit rose 10.4% on year to S$161.8 million.

- Alexander Winifred and Joannah Perez

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