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 industrial production recorded a robust increase for the second consecutive month in June, indicating that manufacturing may be regaining some stability. According to Federal Reserve data released on Wednesday, production at factories, mines, and utilities rose by 0.6% in June, following a revised 0.9% gain in May. This marks the largest two-month advance since late 2021.
Key Highlights:
- June Production Increase: The 0.6% increase surpassed the median estimate of a 0.3% rise in a Bloomberg survey.
- Factory Output: Factory output, which constitutes three-fourths of total industrial production, increased by 0.4%. This broad advance included gains in autos, electrical equipment, appliances, and nondurable goods. The previous month saw an upwardly revised increase of 1%.
- Mining and Utilities: Mining and energy extraction rose by 0.3%, while output growth at utilities also accelerated.
Challenges and Recovery:
Manufacturing has struggled to build momentum due to rising input prices and higher borrowing costs, which have restrained investment. Despite these challenges, the recent data suggests a potential recovery:
- Capacity Utilization: Capacity utilization at factories, a measure of potential output being used, rose to 77.9%, the highest level since September 2023. The overall industrial utilization rate increased to 78.8%.
- Consumer Goods Output: The output of consumer goods rose by 1%, the most significant increase in nearly a year.
- Retail Sales: A separate report showed that US retail sales, excluding the impact of a cyberattack on auto dealerships, rose in June by the most in three months, indicating that consumers regained their footing at the end of the second quarter.
- Motor Vehicle Assemblies: Motor vehicle assemblies surged to 13.4 million on an annualized basis, the highest in nearly nine years.
Conclusion:
The recent gains in US industrial production signal a potential rebound in manufacturing, despite ongoing challenges. The increase in capacity utilization and consumer goods output, coupled with strong retail sales, highlights a positive trend in the industrial sector.
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