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 (May 11): The FBM KLCI closed in the red for the second consecutive day today as regional markets slumped after Wall Street's dismal showing, and as investor sentiment was weighed by yesterday's announcement of a new nationwide movement control order to stem climbing Covid-19 infections.
The benchmark index finished 6.28 points or 0.4% lower at 1,577.64, after trading in the negative territory throughout the session.
Market breadth on the local exchange was overwhelmingly negative, with 980 decliners versus 199 gainers. A total of 5.51 billion securities worth RM2.89 billion were traded, down from yesterday's 6.01 billion shares worth RM3.46 billion.
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Reuters reported that tech-heavy equities in Taiwan and South Korea led losses in Asian markets on Tuesday, as investors were concerned over a potential spike in inflation, while rising Covid-19 cases and curbs in other parts of the region further dampened sentiment.
“Shares in Taipei ended 3.8% lower in their worst session since March 19, 2020, as heavyweight chipmakers fell. Equities in Seoul closed 1.2% lower, with the won weakened 0.5%,” the newswire added.
Back to Malaysia, MIDF's head of research Imran Yassin Md Yusof said the KLCI took cues from sluggish performance across its regional peers as investors sentiment was rattled by Wall Street's overnight tumble.
“Weakness in the KLCI today was mainly driven by the external factor and it was compounded by the new nationwide lockdown or movement control order (MCO 3.0), given the resurgence of Covid-19 cases in local hotspots,” he told theedgemarkets.com.
The benchmark index's slide was somewhat mitigated by the announcement of the first quarter 2021 gross domestic product (GDP) earlier today, which was better than consensus expectations, he added.
Malaysia’s first quarter GDP this year shrank 0.5% from a year earlier, an improvement from the 3.4% fall over the October-December period last year. The latest number beats Reuters forecasts of a 2% contraction.
At a glance, selling across Bursa Malaysia was broad-based today, with all 29 sub-indices closing lower. The FBM ACE was hit the most, tumbling 2.97% to 7,896.49, followed by Bursa’s Technology Index, which fell 2.93%, and the Bursa Energy Index, which dropped 2.79% to 893.77.
Heavyweights that dragged the benchmark index included Genting Malaysia Bhd, Sime Darby Plantation Bhd, Genting Bhd, IHH Healthcare Bhd, and Hartalega Holdings Bhd.
Top losers included Malaysian Pacific Industries Bhd, Transocean Holdings Bhd, Heineken (M) Bhd, Vitrox Corp Bhd, Unisem (M) Bhd, Greatech Technology Bhd, Lotte Chemical Titan Holding Bhd and Carlsberg Brewery (M) Bhd.
Notable gainers included Widetech (M) Bhd, Fraser & Neave Holdings Bhd, Tong Herr Resources Bhd, Adventa Bhd, Nestle (M) Bhd, British American Tobacco (Malaysia) Bhd and Petronas Dagangan Bhd.
The most actively traded stocks were Focus Dynamics Group Bhd, Pegasus Heights Bhd, Fintec Global Bhd, At Systematization Bhd, Tanco Holdings Bhd, UCrest Bhd, Sealink International Bhd, Dagang NeXchange Bhd and Permaju Industries Bhd.
Source: The Edge
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