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.
Taiwan stocks fell to a six-week low on Friday, driven by a global sell-off in tech stocks over concerns of stretched valuations. Meanwhile, other Asian equities showed signs of recovery from previous session losses.
Key Points:
Taiwan Stock Performance:
- Taiwan Semiconductor Manufacturing Company (TSMC) dropped 5.6%, marking its worst session since mid-April.
- Taiwan's benchmark index fell 3.3%, logging a second consecutive weekly loss of 3.3%.
- The Taiwanese market had been closed for two days due to Typhoon Gaemi.
Regional Stock Movements:
- MSCI's gauge of Asian emerging market equities fell 0.4%, reaching its lowest level since mid-June. TSMC comprises just over 12% of this index.
- A broader index of Asian shares extended its 1.9% drop from the previous day, with both indexes set for a second straight weekly loss.
Global Tech Stock Concerns:
- Investors are pulling out of global tech stocks due to US-China trade tensions, implications of a potential Donald Trump presidency, disappointing megacap earnings, and valuation worries.
- Analysts suggest the decline may also be a correction after a strong rally through June.
Analyst Insight:
- Michael Wan of MUFG noted that technology valuations were stretched, prompting a correction. However, he believes Taiwan and South Korea could benefit from improved electronic exports despite current equity valuations.
US Economic Data and Fed Outlook:
- Investors are awaiting US personal consumption expenditure data, the Fed's preferred inflation measure.
- The Fed is expected to start easing interest rates in September, according to CME's FedWatch tool.
Other Asian Markets:
- Jakarta shares rose 0.5%, and Manila shares advanced 0.6% after resuming trade post-typhoon.
- South Korean shares rebounded 0.8% from their six-week low.
- Singapore stocks and the dollar remained largely unchanged after the Monetary Authority of Singapore kept policy settings unchanged.
Currency Movements:
- South Korean won and Indonesian rupiah slipped by 0.3% and 0.2%, respectively.
- Philippine peso rose 0.2%.
- The rupiah’s decline to a two-week low prompted central bank intervention.
Key Indicators:
- Indonesia's 10-year benchmark yield at 6.892%.
- Japan urges G20 vigilance against excessive FX fluctuations.
- Investors show increased long positions on the Singapore dollar, easing bearish bets on Asian currencies.
The global tech sell-off has significantly impacted Taiwan's stock market, while other Asian markets are showing mixed recoveries. Investors are closely watching economic indicators and central bank policies for further direction.
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