KUALA LUMPUR, March 28 (Bernama) -- Bursa Malaysia closed lower today on profit-taking after a strong three-day rally, and investor sentiment was further shaken in the late afternoon session following news of an earthquake in Myanmar with tremors felt in neighbouring Thailand, said Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) slid 1.44 per cent or 22.08 points to 1,513.65, its intraday low, from Thursday’s close of 1,535.73. The benchmark index opened 4.16 points lower at 1,531.57 and hit an intraday high of 1,533.52 during the midday session. On the broader market, decliners outpaced gainers 563 to 395, while 408 counters were unchanged, 1,106 untraded, and 133 suspended. Turnover slipped to 2.25 billion units valued at RM2.13 billion from 2.52 billion units worth RM2.41 billion on Thursday.
Key Takeaways:
China Tech Struggles Amid Tariff Worries: Chinese tech stocks took a significant hit, with the Hang Seng Tech Index falling as much as 3.8%—the steepest drop in over three weeks. Xiaomi saw a major decline of 6.6% following an upsized $5.5 billion share sale, while Alibaba and Sunny Optical also saw notable losses. These losses come after initial optimism spurred by signs that US tariffs might be more targeted rather than sweeping.
US Tariff Update: President Trump has hinted that the upcoming April 2 tariff announcement will be more narrowly focused. The tariff strategy is still expected to affect global trade dynamics, but some investors are hopeful that the US will offer exemptions or adjustments, reducing the worst-case scenario.
Corporate Caution and Market Volatility: Xiaomi and other Chinese companies are grappling with corporate developments that include overbuilt capacity and caution about the potential for a global trade war. With US tariffs potentially escalating, China investors are growing cautious. This tension is seen as a major factor affecting global growth prospects.
Geopolitical Tensions Add to Volatility: Amid geopolitical concerns, including Israeli airstrikes and escalating tensions in Ukraine, investors are seeking refuge in safe-haven assets like gold. This has also led to a slight dip in cryptocurrencies and Treasuries as markets seek stability.
Global Markets Showing Mixed Sentiment: While US stocks gained ground due to tariff relief optimism, Asian markets followed a subdued trend. Markets in Japan and Australia showed minor gains, but Hong Kong’s Hang Seng and Shanghai Composite declined. The S&P 500 futures were also lower, with many markets still grappling with the risks of heightened trade tensions.
Inflation and Fed's Rate Cut Outlook: Analysts are focusing on how US tariffs may affect inflation. Some experts predict that tariffs could hinder progress on disinflation, with fewer rate cuts expected from the Federal Reserve in the near future. The Fed's stance remains cautious amid the trade dispute, signaling a potential wait-and-see approach in the coming months.
What to Watch Next: The April 2 tariff announcement is expected to provide clearer direction for global trade, with implications for tech stocks and sectors heavily reliant on international markets. Investors are urged to monitor the developments closely, especially with ongoing tensions in key regions like China and Europe.
Investor Insight:
The China tech sector has seen volatility, but the tariff rally was short-lived. Geopolitical tensions, ongoing trade uncertainty, and potential US tariff hikes could continue to fuel market swings. Investors should tread cautiously, especially in the short term, as corporate caution and global trade risks remain in focus.
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