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.
Emerging-market currencies fell for the fifth consecutive session on Monday as traders adjusted their expectations for a US Federal Reserve (Fed) interest-rate cut, following signs of a strong US economy. The MSCI Inc. gauge for developing-nation currencies dropped 0.2%, marking its longest streak of losses since July. Among the worst performers were the Malaysian ringgit and Indonesian rupiah.
The decline comes as oil prices rose due to heightened tensions in the Middle East, adding to market uncertainty. Last Friday’s stronger-than-expected US jobs data prompted traders to rethink the Fed’s policy trajectory, pushing US Treasury 10-year yields above 4%, and reducing the likelihood of a half-point interest rate cut.
“The repricing of the US easing cycle is likely to keep emerging-market foreign exchange (EMFX) under pressure in the short term,” said Luis Estrada, strategist at RBC Capital Markets. Bearish bets on the US dollar are being reversed as investors buy dollars to hedge their bets on emerging-market interest rates.
JPMorgan Chase & Co lowered its recommendation on emerging-market local-currency debt, citing the upside surprise in payrolls and risks from the upcoming US presidential election. This follows a strong quarterly advance in emerging-market bonds.
Meanwhile, the benchmark for emerging-market equities rose for a second day, driven largely by gains in Asian semiconductor companies. However, Latin American stocks retreated. Optimism about stimulus measures has sparked a rally in Chinese stocks, with exchange-traded funds focused on China seeing significant inflows.
China’s top economic planner is expected to announce a package of fiscal policies aimed at boosting growth, which will determine whether the current rally can sustain its momentum.
In the credit markets, El Salvador's bonds surged following the government’s tender offer for debt instruments, with 2050 bonds rising as much as 2.8 cents on the dollar.
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