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.
Nvidia Corp experienced an unprecedented increase in market value, adding US$329 billion in a single day, setting a new record for the third-most-valuable company globally. This 13% rally follows a 7% drop that wiped out over US$193 billion, continuing a trend of high volatility.
Key Points:
- Market Value: Nvidia's market capitalization now stands at US$2.9 trillion.
- Volatility: In July alone, Nvidia experienced four of the eight largest market cap declines, driven by shifts in investor sentiment.
- Sector Rotation: Investors have been moving funds from high-growth tech stocks to companies that would benefit from potential Federal Reserve rate cuts.
- AI Investments: Nvidia's value surged with increasing interest in artificial intelligence (AI) investments, though some investors worry about the long-term return on these investments.
- Impact of Fed Policy: The anticipation of Federal Reserve rate cuts, possibly as soon as September, has influenced investor behavior, contributing to Nvidia's recent gains.
- Company and Sector Events: Nvidia's volatility is influenced by sector-specific events such as Advanced Micro Devices Inc's positive AI forecast and Microsoft's significant AI infrastructure spending.
- Investor Sentiment: Despite concerns about the sustainability of capital investments, Nvidia continues to attract investors, partly driven by fear of missing out (FOMO).
Analyst Insights:
- Matt Maley, Miller Tabak + Co: "The volatility in Nvidia shows how confused investors are right now. They're worried that the huge capital investment into AI will not create the kind of return on investment that people have been hoping for over the past year."
- Kunjan Sobhani, Bloomberg Intelligence: "Microsoft’s announcement of increased capital spending, primarily driven by cloud and AI-related demands, fortifies Nvidia’s near-term sales outlook."
Future Outlook:
- Meta Platforms: Investors are looking to Meta Platforms Inc to demonstrate that their AI investments can yield quicker returns compared to peers like Microsoft and Alphabet.
- Continued Volatility: Large tech stocks like Nvidia are likely to continue experiencing sharp swings due to wider market sentiments and specific catalysts.
Nvidia's performance highlights the broader market's volatility and the ongoing investor debate over the profitability and sustainability of significant AI investments.
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