The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
KUALA LUMPUR (Feb 9): The FBM KLCI sank 19.62 points or 1.07% to close at 1,819.82 today, shaving off yesterday's gains as most global markets tumbled into the red on fears of higher US interest rates.
As the volatile trading week came to an end, the benchmark index had lost 50.66 points or 2.71% compared with 1,870.48 at the close of last week.
Meanwhile, the small cap index recorded an even larger decline of 257.75 points or 1.57% today to 16,120.74.
Market breadth remained negative, with 900 decliners outpacing 208 gainers.
Decliners were led by Panasonic Manufacturing Malaysia Bhd, Petronas Gas Bhd and Carlsberg Brewery Malaysia Bhd, while Petronas Dagangan Bhd, Enra Group Bhd and Nestle (M) Bhd were the top gainers.
Naim Indah Corp Bhd, AirAsia X Bhd and Hibiscus Petroleum Bhd were among the most actively traded stocks on the bourse, which saw 2.45 billion shares traded for a total of RM2.67 billion.
Loui Low, head of retail research at Hong Leong Investment Bank, said defensive stocks were coming into play as investors redirected buying interest towards the consumer sector, primarily for blue chips.
"Otherwise, sentiment has been badly affected by the drop in the Dow Jones Industrial Average by over a thousand points," Low said.
The Dow had fallen 1,032.89 points or 4.15% to 23,860.46 overnight, pushing the index to its steepest decline over a week since October 2008. The index has lost 1,660.5 points or 6.51% since Monday.
Across Asia, shares tumbled as investors were spooked by the possibility of the US Federal Reserve hiking interest rates faster than expected, Reuters reported.
Chinese equities were the worst hit, with the Shanghai Composite Index falling 6% to its lowest since May 2017 and the CSI 300 falling 6.1%, both charting their largest single-day losses since February 2016.
Meanwhile, Japan's Nikkei lost 2.32% and South Korea's KOSPI was down 1.82%.
Source: The Edge
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