KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
US stocks surged to all-time highs as the Israel-Hezbollah cease-fire agreement eased geopolitical tensions. The S&P 500 climbed 0.6%, marking its 52nd record high in 2024, while the Nasdaq 100 and Dow Jones Industrial Average rose 0.6% and 0.3%, respectively.
Key Drivers
Geopolitical Relief:
- Investors welcomed news of a cease-fire between Israel and Hezbollah, fueling market confidence and extending gains into a seventh consecutive session.
Trump Tariff Plans:
- Wall Street largely shrugged off Donald Trump’s tariff proposals on Canada, Mexico, and China. Analysts view the move as a negotiating tactic rather than a significant policy shift.
Sector Performance:
- Tech stocks, led by Microsoft, outperformed due to lower exposure to tariff risks.
- Automakers like General Motors and Ford faced pressure over exposure to Mexico and China.
Market Trends:
- The S&P 500 is up 25% in 2024, on track for a second consecutive year of 20%+ returns, a feat achieved only four times in a century.
- The bond market showed muted responses, with 10-year yields rising slightly to 4.30%.
Expert Insights
Optimistic Projections:
- Deutsche Bank forecasts the S&P 500 to hit 7,000 points by the end of 2025, citing robust earnings momentum.
- Bank of America targets 6,666 points, favoring stocks with strong cash returns and ties to the US economy, particularly in financials, consumer discretionary, and utilities.
Diversification Needed:
- Goldman Sachs advises maintaining an overweight position in US equities but suggests diversifying away from the Magnificent Seven tech stocks, which drove nearly half of the S&P 500’s 2024 rise.
Market Outlook
With geopolitical risks easing and strong earnings momentum projected, US equities continue their upward trajectory. However, analysts urge caution over valuation concentration and recommend a balanced, diversified approach to capture opportunities across sectors and regions.
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