KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
China’s factory activity unexpectedly deteriorated in July, with the official manufacturing PMI dropping to 49.3 from June’s 49.7, marking its weakest reading in three months and signaling a contraction despite the recent tariff truce with the US. The figure missed economists’ median forecast of 49.7, raising fresh concerns over the durability of the country’s economic momentum.
Key Data:
Manufacturing PMI: 49.3 (vs. 49.7 in June; est. 49.7)
Non-Manufacturing PMI: 50.1 (vs. 50.5; est. 50.2)
Construction Input Prices: 54.5 (vs. 48.3), driven by rising steel and building material costs.
Market Reaction:
CSI 300 Index: Down ~1% after the release.
China Government Bonds: Futures rose as investors sought safety.
Drivers Behind the Slowdown:
Weak Exports: Early signs that shipments are slowing despite front-loading ahead of tariffs.
Soft Domestic Demand: Consumer spending remains tepid amid persistent uncertainty.
Seasonal & Weather Disruptions: NBS cited high temperatures, heavy rain, and flooding impacting production during July’s “traditional off-season.”
Broader Implications:
The latest PMI highlights the fragility of China’s recovery as the world’s second-largest economy faces headwinds from global trade tensions and muted domestic consumption. Cargo throughput at ports dropped nearly 7% week-on-week, signaling potential softening in trade.
While commodity prices like iron ore and coal have risen on policy hopes and infrastructure demand — including a 1.2 trillion yuan hydropower project in Tibet — deflationary risks linger. A central bank survey revealed Chinese households are increasingly pessimistic, with job market sentiment at record lows.
Outlook:
Despite strong first-half performance surpassing the annual growth target of ~5%, the PMI contraction raises the risk of a more pronounced slowdown in the second half of 2025. Policymakers may be pressed to accelerate stimulus and bolster domestic demand to cushion the impact of global trade uncertainty.
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