KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
KUALA LUMPUR (March 6): The FBM KLCI closed down 7.93 points or 0.53% at 1,483.1 today with Asian stock indices amid persisting concerns on COVID-19’s rapid spread across the globe and its outbreak's impact on the world economy.
The COVID-19 outbreak, which started in China, has spread to other countries including South Korea and the US. Such sentiment has prompted global central banks including the US Federal Reserve and Bank Negara Malaysia (BNM) to cut interest rates to mitigate COVID-19’s impact on the world economy.
"While hope for stimulus by global central bankers to pacify financial markets in the wake of the coronavirus outbreak should lift market sentiment in the near-term, stronger buying momentum and liquidity boost is crucial to promote sustained (stock market) rise to higher ground," TA Securities Holdings Bhd said in a note today.
On Tuesday, the US Federal Reserve's Federal Open Market Committee lowered the federal funds rate by 50 basis points. After the cut, the federal funds rate ranged from 1% to 1.25%, the Federal Reserve said.
"The fundamentals of the US economy remain strong. However, the coronavirus poses evolving risks to economic activity," the Federal Reserve said in a statement.
BNM shared the same sentiment when it said on Tuesday that its monetary policy committee decided to reduce the overnight policy rate (OPR) by 25 basis points to 2.5% to provide a more accommodative environment to support the projected improvement in Malaysia's economic growth amid the global COVID-19 outbreak.
Today, Hong Leong Investment Bank Bhd wrote in a note that Malaysian banks' net interest margin slippage is seen to return in the first quarter of 2020 given the recent OPR cut.
"However, recovery would ensue in the following 3-6 months from downward deposit repricing (lagged impact),” Hong Leong said.
Across Bursa Malaysia today, 2.65 billion shares were traded for RM2.29 billion. Top decliners included Public Bank Berhad and Malaysia Airports Holdings Berhad while leading gainers included rubber glove manufacturers Top Glove Corporation Bhd and Hartalega Holdings Bhd.
Globally, Reuters reported that Asian shares and US stock futures tumbled on Friday as disruptions to business from the coronavirus worsened, stoking fears of a prolonged global economic slowdown.
It was reported that the spread of the coronavirus has accelerated so much in Europe, Britain and North America that investors who once played down the virus or thought it would be largely confined to Asia are now re-assessing the risks, which means more volatility in financial markets.
Source: The Edge
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