KUALA LUMPUR, July 9 (Bernama) -- Bursa Malaysia closed lower on Thursday as renewed geopolitical tensions in West Asia weighed on investor sentiment. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 5.97 points, or 0.36 per cent, to 1,677.64 from Wednesday's close of 1,683.61. The benchmark index opened 2.62 points lower at 1,680.99, and moved between 1,676.18 and 1,683.80 throughout the session. However, market breadth was slightly positive, with gainers leading losers 533 to 504, while 547 counters were unchanged, 1,112 untraded, and 12 suspended. Turnover slipped to 2.64 billion units valued at RM2.19 billion from 2.96 billion units valued at RM2.18 billion on Wednesday.
The Bank of England's split 6-3 vote to hold its key interest rate signals that a rate cut at the February meeting is a strong possibility, according to Suren Thiru, economics director at the Institute of Chartered Accountants.
Key Insights
Cautious Approach to Rate Cuts
- The Bank of England is expected to proceed cautiously with interest rate cuts next year due to rising inflation risks both domestically and internationally.
- "Rate setters are likely to take baby steps in cutting interest rates," said Thiru, emphasizing the challenges posed by complex inflation dynamics.
Inflation Challenges
- While inflation is expected to drift higher, it complicates the timing and pace of policy loosening, leaving the central bank with limited flexibility.
February Rate Cut in Focus
- The 6-3 vote suggests a rate cut could occur in February, but the pace and size of future cuts remain uncertain amid growing economic risks.
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