KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Asian share markets attempted to stabilize on Thursday following a steep global sell-off, while a rally in US Treasuries weakened the dollar and boosted the yen. Concerns over the US economy have heightened expectations of significant interest rate cuts by the Federal Reserve (Fed).
Key Market Movements:
Equities:
- Japan's Nikkei fell 0.5% to its lowest level in three weeks.
- Tech-heavy markets in Taiwan and South Korea both rose by 1%, helping lift MSCI's broadest index of Asia-Pacific shares outside Japan by 0.6%, breaking a three-day losing streak.
US Economic Data:
- Investors are closely watching a week full of economic data releases, including Wednesday's mixed labor data and Tuesday's weak manufacturing figures, which have kept markets jittery.
- The focus is on the upcoming US services industry reading and jobless claims data. However, the key event will be Friday's August non-farm payrolls report, expected to provide clear indications of the US economy's direction and potential Fed actions.
Federal Reserve Expectations:
- Markets are pricing in a 44% chance of a 50-basis point rate cut by the Fed at its September 17-18 meeting, up from 38% a day earlier.
- Traders are now expecting 110 basis points of rate cuts this year from the three remaining Fed meetings.
- Recent US data, such as the drop in job openings to a 3.5-year low, suggests a weakening labor market, potentially prompting the Fed to prioritize employment stability.
Currency Market:
- The US dollar remained weak as investors moved towards safer assets. The Japanese yen, benefiting from this trend, rose nearly 2% for the week to 143.56 per dollar.
- The Swiss franc, another safe-haven currency, steadied at 0.8461 per dollar.
Bond Yields:
- US Treasury yields were stable in early Asian trading hours. The two-year note yield was at 3.775%, after touching its lowest level since May 2023. The 10-year benchmark yield stood at 3.767%.
Commodities:
- Oil prices showed some recovery: Brent crude futures rose 0.45% to $73.03 per barrel, while US West Texas Intermediate crude futures were up 0.52% to $69.56 after declines in the previous session.
Outlook:
The market's attention is squarely on US economic data and the Fed's response. The expectation of rate cuts is fueling both hopes and concerns, with the scale and timing of those cuts remaining uncertain.
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