KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
The Reserve Bank of Australia (RBA) defied market expectations this week by holding the cash rate steady at 3.85%, despite widespread predictions of a third rate cut in five months.
Key Takeaways:
Market Misread: Economists and traders expected a rate cut due to the RBA’s dovish tone in May and its silence leading up to July. However, Governor Michele Bullock emphasized the need for more data before proceeding further.
Vote Breakdown: The RBA’s newly structured board voted 6–3 to hold rates, with Bullock defending the transparency and strategy behind the decision.
Inflation Watch: The RBA is placing more weight on the upcoming quarterly trimmed mean inflation data (due July 30) rather than monthly CPI updates. A print of 2.6% or below could prompt an August rate cut.
Revised Market Expectations: Traders now price in two cuts in 2025 (down from three), pushing the third cut to early 2026.
Housing Market Reaction:
Property prices continue rising across major cities, bolstered by earlier cuts and easing borrowing costs. Despite the hold, buyer sentiment remains resilient, driven by FOMO and long-term investment outlooks.
Global Headwinds:
Uncertainty around President Trump’s tariff agenda and geopolitical risks remain key concerns for the RBA. Officials caution that the true impact of global policy shifts may only be felt years later, citing Brexit as a cautionary precedent.
What’s Next:
All eyes on July 30 — the next inflation data release.
The next RBA policy meeting is in five weeks, where another rate cut could materialize — but only if the data confirms further disinflation.
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