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.
The US trade deficit expanded to $78.8 billion in July, the largest in two years, driven by a significant increase in imports of goods as companies scrambled to secure supply ahead of potential dockworker strikes and the holiday shopping season.
Key Highlights:
Increase in Imports and Exports: The trade gap grew by 7.9% from the previous month, with imports rising by 2.1% to their highest level since March 2022, while exports increased by 0.5%. The increase in imports reflects efforts by US companies to stock up on merchandise and industrial products in anticipation of supply chain disruptions due to a potential dockworkers' strike on the East and Gulf Coasts.
Impact on GDP: The widening trade deficit suggests that trade will once again be a drag on gross domestic product (GDP), following a significant subtraction from GDP in the second quarter. The Federal Reserve Bank of Atlanta's GDPNow forecast had indicated that trade could reduce third-quarter growth by 0.35 percentage points.
Port Activity and Seasonal Factors: The increase in imports has led to heightened activity at major ports, including Los Angeles and Long Beach, which saw their third-strongest month ever in July. This surge is partly due to retailers preparing for the holiday shopping season.
Specific Trade Dynamics:
- The inflation-adjusted merchandise trade deficit widened to $97.6 billion in July, the largest since June 2022.
- The US trade deficit with China grew to $27.2 billion, the largest since September 2022, with US goods imports from China rising by 11.3%.
- The goods shortfall with Mexico narrowed slightly.
The widening trade deficit highlights ongoing challenges in balancing US trade flows, influenced by global economic conditions, supply chain uncertainties, and strategic business responses to potential disruptions.
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