KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
US stock markets showed mixed movements as investors eagerly awaited earnings reports from tech giants Alphabet and Tesla. These reports are crucial in assessing whether the recent market rally has further momentum.
Key Market Movements:
UPS and NXP Semiconductors Fall:
- United Parcel Service (UPS): Shares of UPS plummeted 12.4% due to disappointing earnings results caused by reduced package delivery demand and increased labor costs. This significant drop in UPS shares also impacted the Dow Jones Transport Average, pulling it down by 1.5%.
- NXP Semiconductors: The company's stock fell by 7.2% following a forecast of third-quarter revenue below estimates, affecting the Philadelphia SE Semiconductor index, which declined by 0.8%.
Tech Sector in Focus:
- Alphabet and Tesla: Investors are closely watching the quarterly results from these tech giants. Alphabet's shares rose 0.5%, while Tesla's shares dropped 0.5%.
- Other Tech Stocks: Microsoft and Amazon showed positive movement, with gains of 0.6% and 2.5%, respectively. These performances will test the market's current rotation from mega-cap tech stocks to underperforming sectors.
Small-Cap Stocks:
- The Russell 2000 index, which tracks smaller companies, saw a slight decline of 0.1%. Kim Forrest from Bokeh Capital Partners noted that if smaller companies outperform, they could attract significant investor interest.
Other Corporate Earnings:
- Spotify Technology: Shares jumped 13.6% after meeting second-quarter estimates.
- General Motors: Dropped 5.4% after their earnings report.
- Coca-Cola: Shares rose 1.0% following an increase in their annual sales and profit forecasts.
- Comcast: Fell by 3.8% after missing revenue estimates.
Market Indices Performance:
- Dow Jones Industrial Average: Slightly down by 0.02% to 40,407.86 points.
- S&P 500: Up by 0.19% to 5,575.06 points.
- Nasdaq Composite: Rose by 0.29% to 18,059.27 points.
Economic Data and Future Outlook:
Investors are also focused on upcoming economic data, including the Personal Consumption Expenditures Price Index, the Federal Reserve's preferred inflation measure. This data will play a crucial role in shaping monetary policy expectations, especially amid recent trends of easing inflation and a cooling labor market.
Interest Rate Expectations:
- The probability of a 25-basis-point interest rate cut by September has surged to nearly 92%, from around 60% last month. There is also an expectation of two rate cuts by the end of the year.
Market Breadth:
- On the NYSE, declining issues outnumbered advancers by a 1.46-to-1 ratio.
- On the Nasdaq, the ratio was 1.23-to-1 in favor of decliners.
- The S&P index recorded 17 new 52-week highs and one new low, while the Nasdaq recorded 46 new highs and 30 new lows.
Key Takeaways for Investors:
- Tech Earnings Critical: The upcoming earnings reports from Alphabet and Tesla will be pivotal in determining the sustainability of the recent market rally.
- Economic Indicators Watch: Key economic data, particularly related to inflation, will influence future monetary policy and market directions.
- Sector Rotation: Investors should monitor the potential shift from mega-cap tech stocks to smaller companies, which might present new growth opportunities.
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