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Market Daily Report: Bursa Malaysia Ends Higher In Line With Most Regional Markets

KUALA LUMPUR, Sept 20 (Bernama) -- Bursa Malaysia ended higher on Friday in line with most Asian markets, mirroring gains from Wall Street, where investors welcomed the US Federal Reserve's substantial interest rate cut. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 3.17 points, or 0.19 per cent, to 1,668.82 at the close from Thursday's close of 1,665.65. It opened 5.03 points higher at 1,670.68, trading between 1,668.48 and 1,674.04 throughout the session. In the broader market, gainers outpaced decliners 732 to 468, while 465 counters were unchanged, 850 untraded and 32 suspended. Turnover swelled to 4.19 billion units worth RM5.97 billion, from Thursday's 3.99 billion units worth RM4.08 billion. UOB Kay Hian Wealth Advisors head of investment research, Mohd Sedek Jantan, noted the FBM KLCI's gains were led by utilities, logistics, and banking stocks, reflecting improved market sentiment. Additiona
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US Fed Cuts Rates by Half a Percentage Point, Citing 'Greater Confidence' on Inflation

 

The Federal Reserve reduced interest rates by half a percentage point on Wednesday, marking the beginning of what is expected to be a series of monetary policy easings. The Fed’s rate-setting committee stated that it has gained greater confidence that inflation is moving toward the 2% target, prompting a larger-than-usual rate cut to a range of 4.75%-5.00%.

Despite inflation still being "somewhat elevated," the Fed justified the rate cut by noting progress on inflation and a balanced outlook on employment and price stability. While most policymakers agreed on the 50-basis-point reduction, Governor Michelle Bowman dissented, favoring a quarter-percentage-point cut instead.

The Fed projects additional rate cuts: another half a percentage point by the end of 2024, a full percentage point in 2025, and a final half-point cut in 2026, bringing the rate to a range of 2.75%-3.00%. This reflects a long-term outlook on monetary policy, with the federal funds rate forecasted to settle slightly higher at 2.9%.

Economic projections remain steady, with inflation expected to drop to 2.3% by the end of the year and 2.1% in 2025. The unemployment rate is anticipated to reach 4.4% by year’s end and hold there through 2025. Economic growth is projected to stay at 2.1% through 2024 and slightly lower at 2% in 2025.

Fed Chair Jerome Powell will address the public later, discussing the rate cut, economic conditions, and the Fed’s approach as it heads toward the US presidential election in November.

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