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 Semiconductor Manufacturing Co (TSMC) shares fell the most in three months, dropping as much as 6.5% in Taipei as trading resumed after a two-day typhoon break. This decline contributed to a global tech sell-off spurred by investor skepticism regarding artificial intelligence (AI).
Key Points:
- Market Impact: TSMC's decline dragged down the benchmark Taiex index by more than 4%, nearing a technical correction. Other chip stocks like ASE Technology Holding Co and MediaTek Inc also fell over 5% each.
- Earnings and AI Hype: Weak earnings from major US tech companies have dampened the AI hype, impacting TSMC, which has been a favorite due to its advanced chips and strong earnings. Concerns over high valuation and potential US curbs on chip sales to China have further weakened bullish sentiment.
- Tech Sector Trends: The sell-off in tech stocks has been intensified by weak early tech earnings reports and negative news on China tariffs. Key results from four major tech companies next week will be crucial in determining if the sell-off continues.
- TSMC's Performance: TSMC's shares have fallen over 14% from their peak, significantly affecting the local financial market as the stock constitutes more than a third of the Taiex index.
- AI Investment Boom: Earlier this year, the surge in AI interest led to an investment boom in Taiwan, with retail investors heavily investing in exchange-traded funds. However, recent declines in TSMC's stock may indicate profit-taking and concerns about a potential slowdown in the AI investment boom.
- Typhoon Impact: Despite the typhoon, TSMC reported no impact on its operations as of Thursday. The Taiwanese stock market, valued at US$2.5 trillion, was shut on Wednesday and Thursday due to Typhoon Gaemi.
Currency Movements: The Taiwanese dollar gained 0.2% against the US dollar on Friday, although it had previously fallen to its weakest level since 2016 due to intensified outflows from local equities.
The market continues to watch whether the AI rally is losing momentum, as TSMC's recent performance highlights broader concerns in the tech sector.
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