KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
In the most recent update from the Bureau of Labor Statistics, the core consumer price index (CPI) of the United States demonstrated a minimal increase of 0.1% from May to June 2024, marking the smallest advance since August 2021. This significant slowdown, particularly in housing costs, has reinforced expectations that the Federal Reserve might lower interest rates in the near future.
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- Subdued Core Inflation: The core CPI, which excludes volatile food and energy prices, rose by only 0.1% month-over-month, while the year-over-year figure increased by 3.3%, reflecting the slowest pace in over three years.
- Overall CPI Decline: The broader CPI metric declined by 0.1% from the previous month, indicating the first reduction since the pandemic began, largely driven by lower gasoline prices.
- Impact on Federal Policies: These developments have buoyed market sentiments, with investors increasingly anticipating a rate cut by the Federal Reserve, possibly as soon as September 2024.
- Employment and Economic Activity: Despite a slight rise in recurring jobless claims, a significant drop in new filings suggests resilience in the labor market, adding another layer of complexity to the Fed's upcoming decisions.
Conclusion: As the U.S. inflation trajectory appears to stabilize, the Federal Reserve faces the delicate task of balancing rate adjustments to support economic growth while ensuring inflation targets are met. With core inflation cooling and certain economic indicators showing mixed signals, the path forward for monetary policy remains cautiously optimistic.
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