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.
Oil prices soared by more than a dollar on Wednesday as concerns over escalating tensions in the Middle East raised fears of potential disruptions to crude output from the region. This spike follows Iran's largest military strike against Israel to date.
Brent futures rose by $1, or 1.36%, to $74.56 a barrel, while US West Texas Intermediate (WTI) crude increased by $1.07, or 1.53%, reaching $70.90 as of 0330 GMT. On Tuesday, both crude benchmarks had surged over 5% amid growing geopolitical anxieties.
According to Priyanka Sachdeva, a senior market analyst at Phillip Nova, while oil markets were initially focused on a weakening global economic outlook affecting fuel demand, "the scale quickly turned towards fears of oil supply disruptions in the Middle East after Iran fired ballistic missiles at Israel."
Iran announced on Wednesday that its missile assault on Israel was concluded, barring any further provocations. In response, Israel and the US vowed retaliation against Tehran, exacerbating fears of a wider conflict. Tehran warned that any Israeli response to the attack, which Israel claims involved over 180 ballistic missiles, would lead to "vast destruction."
The United Nations Security Council has scheduled a meeting to address the escalating situation in the Middle East, and the European Union has called for an immediate ceasefire.
The involvement of Iran, a member of OPEC, raises concerns about potential disruptions to oil supplies, especially as the country's oil production reached a six-year high of 3.7 million barrels per day in August. Capital Economics noted, "A major escalation by Iran risks bringing the US into the war," emphasizing that while Iran accounts for about 4% of global oil output, the real concern lies in whether Saudi Arabia will ramp up production if Iranian supplies are affected.
A panel of ministers from the Organization of the Petroleum Exporting Countries and allies (OPEC+) is set to meet later on Wednesday to review the market, with no major policy changes anticipated. OPEC+ plans to increase output by 180,000 barrels per day starting in December.
"Any suggestion that production hikes will proceed could offset concerns of supply disruptions in the Middle East," ANZ analysts stated.
In the US, stockpile data reflected mixed signals: crude oil and distillate inventories fell last week, while gasoline inventories increased, according to figures from the American Petroleum Institute.
Oil investors will also be keenly monitoring Friday's US jobless claims data, which could influence expectations regarding the Federal Reserve's monetary easing. A positive employment report may stimulate overall economic activity, potentially bolstering long-term oil demand, according to Sachdeva from Phillip Nova.
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