KUALA LUMPUR, Aug 20 (Bernama) -- Bursa Malaysia ended higher on Thursday as easing US Treasury yields improved risk appetite following the US Treasury’s announcement of increased buyback operations, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 5.39 points, or 0.31 per cent, to 1,736.71 compared with Wednesday’s close of 1,731.32. The benchmark index opened 0.79 of a point higher at 1,732.11, and fluctuated between 1,732.11 and 1,739.13 throughout the day. On the broader market, losers outpaced gainers 610 to 577, while 610 counters were unchanged, 1,075 untraded and 16 suspended. Turnover increased to 4.28 billion units valued at RM4.01 billion from 3.31 billion units valued at RM2.92 billion on Wednesday. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said lower yields helped ease pressure on growth stocks, with technology counters benefitting from renewed investor interest.
Global markets slid on Friday as concerns over a potential US government shutdown mounted and Donald Trump’s trade threats against Europe heightened tensions. Investors also focused on upcoming US inflation data that could influence Federal Reserve policy for 2025.
Key Market Highlights
1. US Government Shutdown Risks
- A spending bill failed in the House of Representatives on Thursday, highlighting political volatility under President-elect Donald Trump.
- Trump’s proposed tariffs and spending policies have increased uncertainty, with credit default swaps (CDS) on six-month US bills rising to a four-week high of 11 basis points.
2. Trump’s Trade Threats
- Trump warned the European Union to increase purchases of US oil and gas or face tariffs:
- “Otherwise, it is TARIFFS all the way!!!” he stated on Truth Social.
- European stocks fell 1%, marking a 3% weekly drop, as US stock futures slipped 0.7%-1.1%.
3. Inflation and Fed Policy Outlook
- The Core Personal Consumption Expenditures (PCE), a key US inflation measure, is expected to rise 0.2% in November.
- A higher reading could further reduce expectations for rate cuts next year, with markets now pricing in fewer than two cuts for 2025.
4. Treasury and Currency Market Impact
- 10-year Treasury yields surpassed 4.5% for the first time since May, amid a cautious Fed stance.
- Dollar Performance:
- Down 0.3% at 108.12, but close to a two-year peak of 108.43.
- Euro gained 0.2% to US$1.03925.
- Yen recovered 0.4%, trading at 156.87, after plunging 1.7% the previous day due to the Bank of Japan's dovish stance.
5. Commodity Prices
- Oil: US West Texas Intermediate fell 0.6% to US$68.96.
- Gold: Gained 0.5% to US$2,605 per ounce, benefiting from safe-haven demand.
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