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.
Chinese stocks soared on Wednesday, driving a regional market rally as Beijing's stimulus measures continued to fuel optimism. The global rally was further supported by risk-sensitive currencies, while Brent crude hovered near a three-week high.
Meanwhile, the US dollar weakened following weak macroeconomic data, increasing expectations for another significant interest rate cut by the Federal Reserve. At the same time, gold hit a fresh all-time high.
As of 0230 GMT, mainland Chinese blue chips had surged 3.1%, following a 4.3% jump in the previous session. Hong Kong's Hang Seng Index climbed 2.2%, building on Tuesday's 4.1% surge. The rally in Chinese stocks also lifted other regional indices, with Taiwan's benchmark up 1.3% and South Korea's Kospi gaining 0.1%.
Japan's Nikkei rose 0.3%, helped by a retreat in the yen, despite some early weakness.
The People’s Bank of China followed up on its broad policy easing announcement with a cut in medium-term lending rates to banks, the biggest stimulus package since the pandemic. This move included measures to boost China’s stock market and support the struggling property sector.
UBS analysts noted that "the focus in Asia remains very much on China," highlighting the debate on whether the rally has long-term potential, as many investors jumped in to buy or short cover.
Currency Movements and Fed Rate Cut Expectations
The yen retreated by about 0.17% to 143.47 per dollar, reversing earlier gains, while the euro inched up to $1.11915, hitting its highest point in a month. Sterling also edged up, reaching a fresh high since March 2022 at $1.3430.
Overnight, US data revealed a sharp decline in consumer confidence, falling to 98.7 in September from 105.6 in August, the largest drop since August 2021. This further boosted the chances of another 50-basis-point rate cut by the Fed in November, with the probability jumping to 60.4% from 53% the previous day, according to the CME Group's FedWatch Tool.
Australia’s dollar initially scaled its highest level since February of last year but then retreated after data indicated a cooling in monthly inflation, potentially setting up an earlier rate cut by the Reserve Bank of Australia (RBA).
Commodities on the Rise
Gold rose 0.2% to $2,662.50 per ounce, marking a new record high of $2,665.10 earlier in the session. Meanwhile, Brent crude futures remained close to a three-week high, slipping slightly to $74.98 a barrel, while West Texas Intermediate crude dipped to $71.34 per barrel.
With stimulus efforts in China and speculation surrounding Federal Reserve rate cuts, the markets are watching for further developments that could drive these global economic trends.
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