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.
China's largest stimulus package in years has buoyed the commodities market, particularly iron ore, copper, and zinc, as investors anticipate the potential for further gains when mainland markets reopen on Tuesday. The measures, aimed at reviving the property market, have sparked optimism among industry delegates attending LME Week in London, though some analysts caution it may be too soon for celebration.
Despite previous limited efforts to stimulate the economy, Beijing’s latest flurry of announcements at the end of September signals a more aggressive approach. This, coupled with monetary stimulus, fiscal spending commitments, and property market stabilization, has driven a spectacular rally in Chinese stocks.
Iron ore has surged over 25% since Sept 23, with industrial metals like copper and aluminum also performing well. Global mining giants, including BHP Group and Rio Tinto, have seen their share prices rise amid this optimism. However, analysts stress the need for further action, particularly in resolving China’s housing sector issues.
China’s housing inventory, estimated at 43 million units with another eight million under construction, remains a significant challenge. Analysts say lifting property prices and reviving demand will be crucial to sustaining economic recovery. Additionally, some analysts, like Warren Patterson from ING, suggest that until housing inventory stabilizes, it's too early to get overly optimistic.
While metals have benefited, the impact of China’s stimulus measures on other sectors, such as agriculture and foodstuffs, remains limited. Further actions to increase disposable incomes would be required to boost those markets. In the oil sector, traders continue to focus on geopolitical tensions in the Middle East for market cues.
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