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.
Chinese stocks experienced a sharp decline amid skepticism surrounding Beijing's latest stimulus efforts and weak consumer spending data during the Golden Week holiday. The CSI 300 Index dropped as much as 5.1%, marking its first loss in 11 days, after officials from the National Development and Reform Commission (NDRC) announced just 200 billion yuan ($28 billion) in accelerated spending, far below analysts' expectations of a potential 3 trillion yuan package.
Investors, who had been hoping for a more robust fiscal stimulus to complement recent monetary easing, were left disappointed. Analysts such as Alicia Garcia Herrero, chief economist at Natixis SA, warned that Beijing’s delay in addressing stimulus concerns could undermine market confidence. The market reaction underscores a growing mismatch between investors' expectations and Beijing's cautious fiscal approach.
Despite the NDRC's commitment to reaching a 5% GDP growth target, many experts believe this may not be sufficient to stabilize the struggling property market or pull the economy out of its deflationary spiral. Analysts from Morgan Stanley and others suggested that further, more substantial stimulus measures are needed to restore investor confidence and sustain any potential rally. Premier Li Qiang emphasized the need for policies conducive to growth, but details remain scarce.
As markets reassess the situation, expectations now shift to the Ministry of Finance, which could deliver a larger stimulus package, potentially in the range of 2 to 3 trillion yuan, according to banks like Morgan Stanley and Citigroup Inc. However, some, like Xin-Yao Ng of abrdn Asia Ltd., speculate that up to 5 trillion yuan may be needed to truly revitalize the markets.
For now, the ball is in Beijing’s court, and the next few days will be crucial in determining whether more significant measures will be introduced to support the economy and bolster investor confidence.
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