KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
Cocoa futures soared by as much as 12% on Friday in New York, marking the largest intraday jump since May, as fears of dry weather in the world’s top cocoa-producing regions, Ivory Coast and Ghana, raised concerns about the upcoming season's output. The most-active contract reached $7,525 per tonne, on track for a weekly gain of over 10%.
Key Highlights:
Weather Worries: A significant decrease in rainfall over the past month in Ivory Coast and Ghana has led to below-normal soil moisture, potentially stunting crop growth. Forecasts suggest that if rain doesn’t improve by late August, the growing season could end poorly.
Market Sensitivity: Analysts warn that while the current dry spell is concerning, markets may be overreacting to the weather forecasts. The price surge reflects the market's heightened sensitivity to any potential supply disruptions.
Future Predictions: Despite current concerns, some analysts expect cocoa production in West Africa to recover in the new season starting in October, possibly leading to a market surplus. Wetter conditions, if a neutral La Niña pattern develops, could alleviate these concerns.
Mixed Weather Impact: Interpretations of weather impacts are varied, with some analysts noting that above-average rainfall could increase the risk of crop diseases, complicating predictions.
Caution in Coffee Markets: Meanwhile, arabica coffee prices fell as traders reassessed the risk of frost in Brazil, which had previously pushed prices higher. If frost risks are minimal, the coffee market may correct downwards, but a significant frost event could drive prices to near all-time highs.
The cocoa market remains volatile, with future price movements likely dependent on evolving weather patterns in West Africa and broader market reactions to supply concerns.
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