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.
Asian equities are expected to open weaker on Thursday after Wall Street's muted response to U.S. inflation data, which still supported expectations for Federal Reserve (Fed) rate cuts. While equity futures in Japan and Hong Kong declined, Australia's futures advanced, and U.S. contracts remained largely unchanged.
Key Highlights:
Wall Street Reaction: The S&P 500 rose 0.4% on Wednesday, while the Nasdaq 100 edged up 0.1%, following the release of year-on-year core consumer prices that showed the slowest pace of increase since early 2021 in July. The data aligned with expectations and bolstered forecasts for a Fed rate cut in September.
Fed Rate Expectations: The swaps market is now fully pricing in a 25-basis-point cut in September and 100 basis points of cuts through the end of the year. This reflects a belief that the Fed might deliver a 50-basis-point cut in one of its remaining three meetings for 2024.
Treasury and Currency Movements: U.S. Treasuries and the dollar index saw little change on Wednesday, while the yen weakened slightly against the dollar to trade at 147 per dollar.
Focus on Labour Data: Evercore's Krishna Guha emphasized that the Fed is now more focused on labor data than inflation data. The incoming labor data will be critical in determining how aggressively the Fed might pull forward rate cuts.
Asian Market Outlook: Data set for release on Thursday includes Japan’s GDP, the People’s Bank of China’s medium-term lending facility, and Indonesia’s July trade data. Markets in South Korea and India will be closed.
Political Developments in Japan: Investors will also be monitoring the market response to Japanese Prime Minister Fumio Kishida's decision to step down from the ruling Liberal Democratic Party’s leadership election next month, which could lead to a period of modest political uncertainty.
U.S. Stocks and Commodities: The S&P 500 extended its winning streak to five days, driven by gains in financial, energy, and tech shares. Cisco Systems Inc saw a late trading boost due to a strong revenue forecast. Meanwhile, oil prices clawed back gains in early trading after falling for a second session on Wednesday, and gold steadied around US$2,447 per ounce.
Outlook: As the markets react to the CPI data and the evolving political and economic landscape, investors will be keeping a close eye on upcoming labor and retail sales reports, which could influence the Fed's rate decisions and the broader market trajectory.
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