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 ...
European shares fell to near six-month lows amid a global selloff in equities, triggered by fears of a slowdown in US economic growth. The market turmoil saw only a handful of stocks trading in positive territory.
Key Market Movements
STOXX 600 Index:
- The pan-European STOXX 600 index fell 2.2% to 487.15 points by 0827 GMT, reaching its lowest level since February 14.
- The Euro STOXX volatility index rose 5.7 points to 30.26, the highest since March 2023.
Major European Indices:
- Germany's DAX: Fell more than 2%.
- France's CAC 40: Dropped over 2%.
- Britain's FTSE: Declined by more than 2%.
- Spain's IBEX 35: Also fell more than 2%.
Japan's Nikkei:
- Closed 13% lower, marking its largest drop in nearly 40 years, impacting sentiment across European markets.
Chris Beauchamp, chief market analyst at IG Group, remarked, "You don't get the Nikkei falling by its largest amount in nearly 40 years without some kind of repercussions across European markets." He added that while the initial panic seems to be over, "it takes a few days to sort out."
Sector Performance
Energy Stocks:
- Took the hardest hit, falling 3.4% after oil prices dropped 1% as US recession fears overshadowed supply concerns in the Middle East.
Financial Shares:
- Banks lost 3%, while financial services shed 2.8%.
- The tech sector also slipped 2.1%.
Economic Data and Central Bank Actions
US Economic Concerns:
- Last week's weak July payrolls report raised concerns about the health of the US economy, prompting a global risk-off sentiment.
- The ISM non-manufacturing survey for the US employment in the service sector will be released later in the day, providing further insights into economic conditions.
Federal Reserve and ECB Rate Cuts:
- Markets are pricing in a 78% chance of a 50-basis-point rate cut by the Federal Reserve on September 18.
- Traders also expect a second rate cut by the European Central Bank (ECB) on September 12.
Eurozone Business Activity:
- Growth in eurozone business activity stalled last month, with the Purchasing Managers' Index for the currency union falling to 50.2 in July from 50.9 in June.
- Germany's services sector growth slowed for the second consecutive month in July.
Individual Stock Performances
Galderma:
- Gained 6.7% after L'Oreal announced it would acquire a 10% stake in the Swiss skincare firm from a group of major shareholders.
OCI Global:
- Jumped 10.3% following Woodside Energy's decision to acquire the Dutch chemicals maker's clean ammonia project in Texas for US$2.35 billion.
Conclusion
The selloff in European stocks highlights the ripple effects of US economic concerns on global markets. As investors grapple with fears of a recession and potential interest rate cuts, the focus remains on upcoming economic data and central bank decisions that could influence market dynamics. The volatility underscores the challenges facing financial markets amid heightened economic uncertainty and geopolitical tensions.
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