KUALA LUMPUR, Sept 28 (Bernama) -- Bursa Malaysia ended marginally lower on Monday amid selling activity as the market lacked fresh catalysts to spur investors’ buying interest, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 1.60 points, or 0.09 per cent, to 1,670.02, from Friday’s close of 1,671.62. The benchmark index, which opened 0.93 of-a-point higher at 1,672.55, moved between 1,668.61 and 1,674.11 throughout the trading session. Market breadth was negative as losers surpassed gainers 748 to 388, while 517 counters were unchanged, 1,271 untraded and 91 suspended. Turnover slipped to 3.11 billion units worth RM2.40 billion from 4.07 billion units valued at RM2.69 billion on Friday.
Wall Street experienced a notable rebound on Monday, recovering from last week's declines. Investors are now evaluating the implications of President Joe Biden's withdrawal from the upcoming presidential race and the potential for a second term for Republican nominee Donald Trump.
Key Developments
Biden's Withdrawal:
- President Joe Biden announced his decision to opt out of the presidential race, endorsing Vice President Kamala Harris as his successor.
- This development influenced the political betting markets, with PredictIT showing a slight drop in odds for a Trump victory and an increase for a Harris win.
Market Reaction:
- Major stock indices rose, with the Dow Jones Industrial Average gaining 0.36%, the S&P 500 up 0.86%, and the Nasdaq Composite increasing by 1.23%.
- Megacap stocks, including Alphabet, Microsoft, Apple, and Tesla, saw gains ranging from 1% to 4.2%.
- The Information Technology index led the sectoral gainers, with most sectors in the green except for Energy.
Impact on Trump-Linked Stocks:
- Trump Media & Technology Group saw a reversal of pre-market gains, slipping by 0.2%.
- Software firm Phunware gained 0.6%.
Investor Sentiment:
- Analysts suggest that Biden's exit might lead to an unwinding of trades based on expectations of increased fiscal and inflationary pressures under a Republican victory.
- There is speculation that markets could benefit from the likelihood of a divided government in the next administration.
Market Drivers:
- The current market rotation is influenced more by disinflation and potential rate cuts rather than political developments.
- Key quarterly earnings reports, including from Alphabet and Tesla, will test the sustainability of the recent rally in high-momentum stocks.
- The small-cap Russell 2000 gained 0.6%.
Economic Data:
- Crucial economic data, including the Personal Consumption Expenditures Price Index, is expected to provide insights into the Federal Reserve's likely monetary policy path.
- Traders are broadly anticipating a 25-basis-point rate cut by September and two cuts by the year-end.
Single Movers:
- Nvidia rose by 2.8% following reports of its new AI chips for the China market.
- Verizon Communications fell by 5.4% after missing second-quarter revenue expectations.
- CrowdStrike slipped by 8.3% due to a software update that caused a global tech outage.
Market Breadth
- Advancing issues outnumbered decliners by a 3.08-to-1 ratio on the NYSE and by a 2.55-to-1 ratio on the Nasdaq.
- The S&P index recorded four new 52-week highs with no new lows, while the Nasdaq recorded 16 new highs and 17 new lows.
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