PETALING JAYA: Fears over a looming US-China trade war and a political crisis in Italy jolted global financial markets today, with the Malaysian bourse tumbling as much as 66.33 points or 3.74% at one point, exacerbated by uncertainty on the domestic front amid the review and revocation of several mega projects. The FBM KLCI slumped to an intraday low of 1,709.51 points in the afternoon session after Prime Minister Tun Mahathir Mohamad announced the scrapping of the MRT3 project. At the close of trading on Bursa Malaysia, the key index was down by 56.56 points or 3.18% to 1,719.28 points, the lowest level in the past five months. Losers outnumbered gainers 995 to 148 with some 3.6 billion shares traded valued at RM4.46 billion. Of the other indicators, the construction index saw the sharpest decline of 8.52 points or 3.79% to 216.04 points, followed by the properties and the finance indices, which fell 4.75% and 3.09% to 1,009.87 points and 17,188.82 points, respectively. The top losers were led by banking stocks such as Public Bank, Malayan Banking and Hong Leong Bank, which slid 3.7%, 4.3% and 1.8% to RM23.98, RM9.57 and RM18.60, respectively. Other big-cap stocks like Tenaga Nasional, Petronas Chemicals and Gamuda tumbled 4.3%, 3.9% and 23% to RM14.14, RM7.99 and RM3.18. Meanwhile, the ringgit weakened as much as 0.29% to 3.9952 against the US dollar before paring losses to 3.9895 as at 5pm today, a 0.15% drop from Monday's close at 3.9835. Across the region, China's and Singapore's markets declined over 2% each today after US stocks posted their biggest drop in a month on Tuesday, with the Dow Jones Industrial Average Index slipping close to 400 points or 1.58% to settle at 24,361.45 amid trade war fears and political uncertainty in Italy. Two-year Italian government bonds soared over 180 basis points. The White House said on Tuesday that planned trade sanctions against China announced in March were still in the works, and would be announced next month, according to news reports. The planned sanctions include curbs on Chinese investment, export controls and 25% tariffs on as much as US$50 billion (RM200 billion) of Chinese tech exports. The list of Chinese imports covered by the tariffs will be announced on June 15, and the other sanctions two weeks after that. Areca Capital Sdn Bhd CEO Danny Wong Teck Meng said the US-China trade row and the Italian political turmoil sparked fears in global markets. Wong opined that the sell-off in Malaysia was more to do with the external factors, but cautioned that the broader market will continue to be uncertain in the next two to three months before stabilising after greater clarity on the new government's policies emerges. As for the construction stocks, he said volatility is expected to persist in the next two months. "No matter what news comes out, construction stocks will see selling pressure," he told SunBiz. On the currency front, FXTM's global head of currency strategy & market research Jameel Ahmad does not rule out the possibility that the ringgit could weaken back below 4.00 to the greenback over the coming trading sessions. "A host of different emerging market currencies are falling against the US dollar due to the negative environment of different political risks that is impacting investor appetite towards riskier assets, and the ringgit is at risk to falling as a result of less attraction towards emerging market currencies," he said in an email reply to SunBiz. He added that the worst-case scenario would be that investor appetite for emerging market assets, including the ringgit, continues to weaken, pressured by less buying momentum.