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 ...
Asian stocks rose on Tuesday, led by Japanese and South Korean equities, while the yen steadied after weakening against the dollar over the past week. In contrast, Australian shares fell, and Chinese markets showed mixed performance in early trading. The S&P 500 futures slipped ahead of Wall Street’s reopening following the Labor Day holiday in the US.
Key Highlights:
Yen’s Stability Amid Interest Rate Divergence:
- The yen remained steady against the US dollar after a four-day decline. Mark Matthews of Julius Baer suggests that the Japanese currency will remain weak due to the significant interest rate differential between the US and Japan. While the Bank of Japan's policy rate is expected to be 0.5% by March next year, the US Federal Reserve's rate is anticipated to be around 4.5%, maintaining a substantial gap.
Concerns Over China's Economic Performance:
- Traders are closely watching for signs of economic strain in China, where factory activity contracted for a fourth consecutive month in August. This downturn highlights the urgency for fresh government stimulus, as excess inventories from steel to soybeans pile up, indicating weak economic activity.
US Market Outlook and Rate Cut Speculation:
- Market participants are cautious as historical data indicates September has been a challenging month for stocks. The upcoming US jobs report on Friday will provide insights into the Fed's rate policy, as traders currently anticipate a potential rate cut. However, JPMorgan strategists warn that even a rate cut might not bolster equity markets, as it would reflect underlying growth concerns.
Oil and Geopolitical Developments:
- Oil prices rose after Libya declared force majeure at a key oil field, contributing to significant supply disruptions. Meanwhile, the US is preparing new sanctions against Venezuelan officials following Nicolás Maduro's disputed re-election and subsequent political crackdown.
Overall, Asian markets are experiencing a mixed reaction, reflecting global economic uncertainties, interest rate differentials, and geopolitical tensions. Investors remain vigilant ahead of key economic data and potential policy shifts.
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