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 (Dec 7): The FBM KLCI managed to eke out a 0.06% or 1.04-point gain today, rising to 1,622.89.
Malaysia’s headline index had opened slightly higher at 1,622.94 and reached its intra-day high of 1,627.59 at 4.20pm, but pared its gains at the close.
Rakuten Trade Research vice president Vincent Lau noted that the minor gain was the result of window-dressing activities.
The top gainers among the FBM KLCI were Petronas Chemicals Group Bhd, Genting Bhd and Hong Leong Financial Group Bhd.
In terms of total trading volume today, the local bourse saw 16.49 billion shares worth RM7.23 billion traded. This trading volume is the highest seen since Nov 17, 2020.
"Today’s trading volume was on account of greater retail investor participation, which is expected to be vibrant at least in the near term," he noted.
Top actives included Yong Tai Bhd, Top Builders Capital Bhd and PA Resources Bhd. Meanwhile, today’s top value gainers were British American Tobacco (M) Bhd, Heineken Malaysia Bhd and Hengyuan Refining Company Bhd, while Nestle (Malaysia) Bhd, Fraser & Neave Holdings Bhd and PPB Group Bhd were the top decliners.
For the most part, Asian indices were in the red. In Japan, the Nikkei 225 was down by 0.76% or 203.8 points at 26,547.44. Meanwhile, the Shanghai Composite finished lower at 3,416.6 after falling 0.81% or 27.98 points, whereas the Hong Kong Hang Seng concluded the trading day 1.25% or 334.94 points lower at 26,500.98. However, in South Korea, the Kospi was up by 0.51% or 13.99 points at 2,745.44.
The declines seen across regional markets followed reports that the US is preparing to launch sanctions on some Chinese officials over the crackdown in Hong Kong.
“However, other emerging Asian stock markets retreated from highs hit over vaccine optimism and the US$908 billion aid bill in the United States after Reuters reported that President Donald Trump's administration was preparing sanctions on some Chinese officials over the crackdown in Hong Kong,” Reuters reported today.
In a note today, TA Securities Research said a profit-taking correction is likely for the FBM KLCI this week given the “increasingly overbought technical momentum seen on the daily and weekly slow stochastics indicators after the FBM KLCI surged to trade at a fresh 16-month high”.
This would be particularly the case after Fitch Ratings downgraded Malaysia last Friday (Dec 4), it added.
That being said, this correction is expected to be brief and necessary, in order to neutralise excessively overbought conditions and encourage bargain hunting, while vaccine-related and economic recovery plays should prevail given the robust buying momentum witnessed on the broader market, said TA Securities Research.
Source: The Edge
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