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.
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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