KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Asian financial markets rallied on Monday after Federal Reserve Chair Jerome Powell signaled a dovish policy stance at Jackson Hole, boosting risk sentiment across regional equities and currencies.
The Malaysian ringgit gained 0.6% to 4.20 per USD, its sharpest intraday rise in three weeks, while the Indonesian rupiah climbed 0.5% to a one-week high. The Taiwan dollar advanced 0.6% and the Indian rupee strengthened 0.2%.
Equities also posted strong gains, led by Taipei’s benchmark index (+2.5%), buoyed by semiconductor shares. Jakarta and Seoul rose over 1%, while Bangkok added 0.7%.
Fed Pivot Boosts Risk Assets
Powell highlighted growing risks to the US job market, reinforcing expectations of monetary easing:
80% probability of a 25bps Fed rate cut in September (Sept 16–17 FOMC).
Nearly 50bps of cumulative easing priced in by year-end.
The US dollar index stayed near a one-month low at 101.74, further supporting Asian FX.
Semiconductor Tailwind
Taiwan and South Korea benchmarks received an additional lift from chipmakers after reports that Nvidia halted production of its China-focused H20 AI processors, potentially opening opportunities for regional competitors.
Regional Central Bank Outlook
The prospect of Fed easing is shifting the policy space for Asian central banks:
Bangko Sentral ng Pilipinas (BSP): Expected to cut 25bps this Thursday.
Bank of Korea (BOK): Likely to hold rates steady.
Bank Indonesia: Surprised with a 25bps cut last week, and signaled further easing.
Nomura analysts see greater risk-reward in ASEAN-4 laggards (Indonesia, Malaysia, Philippines, Thailand), where Fed rate cuts could provide more room for growth-supportive monetary policy.
Investment Implications
FX: High-yielders like the rupee and rupiah remain favoured, given attractive yield spreads as Fed cuts weaken the dollar.
Equities: Asia-ex Japan, particularly ASEAN-4, could benefit from a broadening rally as global liquidity conditions ease.
Risks: Inflation surprises, geopolitical tensions, and trade frictions (e.g., US tariffs, China supply-chain shifts) could temper gains.
Bottom Line
Powell’s dovish pivot has reinvigorated Asian risk assets, with currencies and equities rallying on easing hopes. While optimism is running high, the sustainability of flows into ASEAN and tech-driven markets will depend on incoming US inflation and jobs data — and critically, Nvidia’s earnings this week as a sentiment barometer for the AI trade.
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