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.
European shares and US stock futures bounced back on Friday, stabilizing after a turbulent week where global equities fell nearly 2%. The dollar also regained ground against the yen.
Key Points:
US Inflation Data:
- The US personal consumption expenditures index, the Federal Reserve's preferred inflation measure, slightly cooled to 2.5% year-on-year in June.
- Traders' expectations for two or three Fed rate cuts this year remained unchanged.
Market Performance:
- S&P 500 futures rose 0.72%, following a 1.9% weekly decline up to Thursday.
- Nasdaq futures, which had dropped 7% over the past two weeks, increased by 1%.
- The STOXX 600 index in Europe climbed 0.58%, set to end the week 0.4% higher after a 2.7% loss last week.
- Germany's DAX index rose 0.46%, and Britain's FTSE 100 gained 1%.
Sector Rotation:
- Recent cooler US economic data sparked hopes for Fed rate cuts, leading investors to favor smaller companies tied to the economy and borrowing costs.
- Popular artificial intelligence stocks like Nvidia saw a sell-off, contributing to a 1.7% drop in global stocks this week.
- Max Kettner, chief multi-asset strategist at HSBC, described the trend as an unwinding of long positions in growth and AI stocks.
Global Markets:
- Japan's Nikkei fell 0.53% overnight, while Hong Kong's Hang Seng inched up 0.1%.
- US 10-year Treasury yields dipped slightly to 4.221% after the inflation data, with shorter-dated yields falling 10 basis points for the week.
Currency Movements:
- The Japanese yen, which rallied 1.8% this week, slipped from a 12-week high, with the dollar up 0.3% against the yen at 154.39.
- The dollar index against six major currencies remained steady at 104.36, while the euro edged up to US$1.0857.
- The yen's recent rally was driven by expectations of Fed rate cuts and possible BOJ rate hikes, alongside suspected BOJ intervention.
Market Outlook:
- HSBC's Kettner suggested that strong earnings reports from Amazon, Apple, and Microsoft next week could help stabilize stock markets.
- Investors remained cautious ahead of the Bank of Japan and Federal Reserve interest rate decisions next Wednesday.
Oil Prices:
- Brent crude prices slipped by 0.67% to US$81.82 per barrel.
Summary: Global markets showed signs of recovery after a challenging week, buoyed by cooling US inflation data that maintained hopes for Fed rate cuts. European and US stock futures rose, led by gains in tech and chip stocks. The yen's rally paused, and Treasury yields dipped slightly. Investors await key earnings reports and central bank decisions next week to provide further market direction.
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