KUALA LUMPUR, March 17 (Bernama) -- Bursa Malaysia extended gains to a third consecutive session today, driven by broad-based buying across various sectors following the recent strong sell-off, in line with the performance of regional markets, an analyst said. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 15.66 points, or 1.04 per cent, to 1,527.81 from Friday’s close of 1,512.15. The benchmark index opened 5.43 points firmer at 1,517.58 -- its intraday low -- and peaked at 1,531.63 during the mid-morning session and maintained its momentum throughout the afternoon session. On the broader market, gainers thumped decliners 708 to 297, while 425 counters were unchanged, 994 untraded, and seven suspended. Turnover improved to 3.28 billion units worth RM2.40 billion from 3.24 billion units worth RM2.5 billion on Friday.
President Donald Trump caused a stir on Tuesday when he threatened to double tariffs on Canadian steel and aluminum after Ontario retaliated with higher tariffs on electricity exports to the U.S. However, by the end of the day, both sides agreed to suspend these measures.
Key Points:
Tariff Threat and Retaliation: The tension began on Monday when Ontario announced it would impose a 25% surcharge on electricity sent to U.S. states like Michigan, Minnesota, and New York. Trump responded by threatening to raise tariffs on Canadian steel and aluminum from 25% to 50%, starting the next morning.
Negotiations and Suspension: Late Tuesday, after talks between Ontario Premier Doug Ford and U.S. Commerce Secretary Howard Lutnick, Ontario agreed to suspend the electricity surcharge, which led to a de-escalation of the tariff threats.
Ongoing Steel and Aluminum Tariffs: Despite the suspension of the electricity tariffs, the 25% import tariffson steel and aluminum from all countries, including Canada, will still go into effect on March 12.
Market Impact:
Steel and Aluminum Stocks: Shares of steel and aluminum producers saw an immediate boost following the tariff news. Stocks like Alcoa rose 3.1%, while other major steelmakers such as Cleveland-Cliffs, U.S. Steel, Nucor, and Steel Dynamics gained about 3% on average.
Auto Makers Hit Hard: Automakers took a hit as Trump also promised higher tariffs on cars assembled in Canada and sold in the U.S., effective April 2. Toyota shares dropped 2% as analysts raised concerns about higher supply chain costs.
Alcohol Industry Reaction: Stocks of alcohol makers such as Brown-Forman and Constellation Brands also dipped, with concerns over potential additional tariffs on exports to Canada.
Commodity Price Impact:
Steel Prices: The prospect of tariffs pushed steel prices up from about $740 per ton to $930 per ton. Aluminum prices also saw a smaller increase of $100 per metric ton, reaching $2,700.
Mixed Investor Reactions: While prices for these commodities increased, shares of steel and aluminum companies have been down since Trump’s initial tariff announcement in early February. The market remains volatile, with investors uncertain about the long-term effects of tariff-induced price hikes.
Canada’s Strain:
- Dairy Tariffs: Trump also brought up Canadian tariffs on dairy products, claiming that Canada relies too much on the U.S. for defense. He even repeated his call for Canada to become the 51st state, a notion firmly rejected by Canada.
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