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.
US stock futures faltered, the dollar weakened, and bond prices rallied on Wednesday following a contentious presidential debate where Vice President Kamala Harris put former President Donald Trump on the defensive. Investors remained cautious ahead of US inflation data that could influence the Federal Reserve's policy decisions next week.
Key Takeaways:
Market Reaction to Presidential Debate: The debate between Harris and Trump, covering topics like abortion, the economy, immigration, and Trump's legal issues, left investors uncertain. The performance of Harris has fueled expectations of a decline in interest rates, while Trump's potential victory is associated with higher spending that could push rates up.
Bond Yields Fall: US Treasury and eurozone government bond yields dipped, with 10-year Treasury yields dropping to 3.609%, the lowest since June 2023. Germany's 10-year yield fell to a one-month low at 2.12%. This reflects investor anticipation of rate cuts due to economic uncertainties and Harris's strong debate showing.
Stock Market Moves: S&P 500 futures fell by 0.36%, while the MSCI Asia-Pacific index outside Japan declined by 0.3%. In contrast, European shares edged up, driven by gains in the oil and gas sectors amid concerns about Hurricane Francine disrupting US output.
Currency Market Trends: The dollar index dropped 0.3% to 101.39, while the yen strengthened over 1% to 140.71 per dollar, buoyed by remarks from Bank of Japan board member Junko Nakagawa about potential interest rate hikes if economic conditions align with forecasts.
Cryptocurrency and Commodities: Shares of US cryptocurrency and blockchain companies declined, tracking a 2% fall in Bitcoin. Meanwhile, oil prices rebounded, with Brent crude rising 1.47% to $70.21 per barrel and West Texas Intermediate crude climbing 1.73% to $66.88, amid concerns over Hurricane Francine's impact on US output.
Focus on Inflation and Fed Policy: Investors are closely watching the US consumer price index report for further guidance on the Fed's rate decision next week. The market is currently pricing in a 65% chance of a 25 basis point cut and a 35% chance of a 50 basis point cut by the Fed on September 18.
The mixed market reactions highlight the continued uncertainty in the economic and political landscape, with investors weighing the potential outcomes of the upcoming inflation data and its impact on Federal Reserve policy.
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