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.
The brief rally in Chinese equities fueled by stimulus optimism is losing momentum as investor doubts resurfaceover Beijing's ability to revitalize the world's second-largest economy.
Key Points:
Trade Data Highlights Challenges:
- Imports fell 3.9% year-on-year in November, marking the sharpest drop in 14 months and defying expectations of a 0.2% rise, per FactSet data.
- Exports increased 6.7%, slowing significantly from October’s 12.7% jump, indicating potential headwinds for the economy.
- These figures come amid looming threats of higher U.S. tariffs under President-elect Donald Trump, which are expected to further impact Chinese exports in 2025.
Investor Sentiment Turns Cautious:
- Optimism about Beijing’s looser monetary policies and proactive fiscal measures faded quickly. The CSI 300 Index surged 3.3% at one point on Monday but ended the day up just 0.7%.
- AJ Bell analyst Dan Coatsworth noted, "The trade data fails to inspire confidence in Beijing's recovery measures." Concerns over higher U.S. tariffs compound the uncertain outlook.
Market Reaction:
- U.S.-listed Chinese stocks, which rallied sharply on Monday, saw significant pullbacks:
- Alibaba ADRs fell 3.4% after a 7.4% gain the prior day.
- JD.com dropped 4.6% following an 11% surge.
- Chinese EV makers $NIO, $Li Auto, and $XPeng faced steep declines, falling 6.85%, 4.92%, and 3.94%, respectively.
- London-listed miners also reversed gains. Stocks like Glencore, Antofagasta, and Endeavour Miningfell over 2%, reflecting reduced hopes for commodity price boosts from China’s stimulus.
Key Takeaways:
- Trade Data and Tariffs Weigh on Optimism: The weak trade figures and uncertainty around U.S.-China relations underscore the challenges for Beijing’s stimulus measures to drive sustainable recovery.
- Market Volatility Reflects Fragile Confidence: Investors remain skeptical of the scale and effectiveness of China’s policy efforts, prompting sharp reversals in both Chinese stocks and commodity-linked equities.
- Short-Term Gains Under Threat: While Monday's rally signaled initial enthusiasm, the broader economic and geopolitical environment suggests continued headwinds for Chinese equities and related sectors.
Outlook:
Without clear signs of robust domestic recovery or resolution on international trade issues, Chinese equities and commodity-linked stocks may remain volatile, with gains highly sensitive to incremental policy updates.
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