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.
Strong Domestic Demand and Business Investment Offset Tariff Headwinds
Japan’s economy grew 1% annualised in Q2, beating forecasts of 0.4% and reversing the prior quarter’s preliminary contraction. Gains were driven by business investment (+1.3% QoQ) and private consumption (+0.2%), signalling resilience despite higher US tariffs on autos and steel.
The yen strengthened on the news, with markets now pricing a higher probability of a Bank of Japan rate hike in October. Bloomberg’s survey shows 42% of economists expect the move, up from previous expectations of no change.
Key drivers:
Corporate Capex Resilience: BOJ’s Tankan survey showed large firms plan to boost FY25 investment by 11.5%, up from 3.1%.
Consumer Spending Support: Solid wage gains (+5% YoY) from spring negotiations are gradually lifting household incomes.
Net Export Boost: +0.3ppt to GDP as exports rose 2% despite tariffs, aided by price cuts, front-loaded shipments, and record inbound tourism (+18% visitor spending).
Risks ahead:
Tariff effects may deepen in Q3 as front-loading ends.
Persistent inflation remains above the BOJ’s target, though rising real wages could cushion household spending.
Market Implication:
The upside surprise strengthens the BOJ’s tightening case, with September seen as a hold and October emerging as a potential hike window. Resilient domestic demand offers political relief for PM Shigeru Ishiba, even as his government faces pressure from higher living costs and trade uncertainties.
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