KUALA LUMPUR, June 12 (Bernama) -- Selected blue-chip counters trading at attractive valuations helped Bursa Malaysia close higher on Friday, despite cautious market sentiment driven by developments in West Asia, volatility in crude oil prices and uncertainty over the global interest rate outlook. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 4.10 points or 0.24 per cent to 1,683.63 compared with Thursday's close of 1,679.53. The key index opened 5.34 points stronger at 1,684.87 earlier today and moved between 1,679.72 and 1,685.39 throughout the session. Market breadth was negative, with losers leading gainers 533 to 479, while 561 counters were unchanged, 1,130 untraded and 33 suspended. Turnover fell to 2.79 billion units worth RM2.31 billion from 3.32 billion units worth RM2.88 billion yesterday.
The Russell 2000 Index (RUT) — a key barometer for small- and mid-cap U.S. stocks — hasn’t set a new high since Nov. 8, 2021, marking nearly four years below its peak. Meanwhile, the S&P 500 continues to hit fresh records, creating the longest divergence on record between the two indexes while the S&P climbs.
Why It Matters:
A healthy market is usually “firing on all cylinders,” with small- and large-cap stocks moving in sync.
Historical example: In 2007, the Russell 2000 peaked 3 months before the S&P 500, foreshadowing the Global Financial Crisis.
Is This a Red Flag Now?
Analysts say long-term (multi-year) divergences don’t necessarily signal major tops.
Short-term divergences (1–3 months) are more predictive. In late 2021, the Russell lagged the S&P by 7%, preceding the 2022 bear market.
Current Outlook:
The past 3 months tell a different story:
Russell 2000: +18.7%
S&P 500: +18.2%
The Russell is nearing its first golden cross in 18 months, a bullish technical signal.
Market strategists see “no evidence of a major top” at present.
Investor Takeaway:
The Russell 2000’s long underperformance raises questions about breadth in the rally, but recent momentum suggests small-caps may be turning a corner. For investors, it may be a signal to watch for confirmation of a breakout rather than a warning of an imminent crash.
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