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.
All three major US stock indices closed higher on Wednesday, with a strong performance from the technology sector compensating for investor disappointment following a morning inflation report. The report diminished hopes that the Federal Reserve would cut interest rates by 50 basis points next week. The Dow Jones Industrial Average rose 124.75 points (0.31%) to 40,861.71, the S&P 500 gained 58.61 points (1.07%) to 5,554.13, and the Nasdaq Composite surged 369.65 points (2.17%) to 17,395.53.
The S&P 500 technology index led the charge, finishing up 3.3%, boosted significantly by AI chipmaker Nvidia, which added 8% following reports that the US government might allow exports of advanced chips to Saudi Arabia. This uptick in the tech sector provided essential support to the broader market, despite inflation concerns.
Earlier in the day, the Labor Department's consumer price index (CPI) showed a 0.2% rise for August, aligning with July's figure, while the Core CPI, which excludes volatile food and energy prices, rose 0.3%, exceeding economists' expectations. This led to a recalibration of market bets on a potential rate cut: traders are now pricing in an 85% probability for a 25 basis points cut by the Fed, down from a 66% chance on Tuesday. The likelihood of a 50 basis point cut has decreased from 34% to 15%.
As investors absorbed the inflation data, they turned their attention to the tech sector, which emerged as a significant driver of market strength. "Technology was the standout, helping to prop up the broader market," said Jack Janasiewicz, portfolio manager at Natixis.
Meanwhile, political developments also influenced the market, with the aftermath of the US presidential debate between Kamala Harris and Donald Trump causing shifts in sentiment. Stocks typically seen as benefitting from a Trump presidency, such as cryptocurrency and blockchain-related shares, declined, while solar stocks, favored under a potential Harris administration, saw gains.
Despite a generally positive day for stocks, some sectors lagged. The energy sector fell 0.93%, and consumer staples dropped 0.88%. In contrast, consumer discretionary stocks were the second-largest gainers, up 1.3%.
Financial stocks pared losses after early declines, with major US lenders like Goldman Sachs and JPMorgan rebounding. The financial sector had been under pressure due to concerns over a potential dip in trading revenue and slower recovery in investment banking.
Overall, advancing issues outnumbered decliners across the NYSE and Nasdaq, reflecting a cautiously optimistic market sentiment amid mixed economic and political signals.
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