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.
Sharp Hike Signals Hardline Stance
US President Donald Trump signed an executive order raising tariffs on Canadian goods to 35% from 25%, covering all products outside the US-Mexico-Canada Agreement (USMCA). The escalation underscores a hardline US trade posture heading into the Aug 1 deadline.
Transshipment Route Closed Off
To prevent tariff evasion, the White House added a 40% levy on transshipped goods, targeting supply chains rerouted via third countries. This move tightens cross-border logistics and increases compliance costs for exporters.
Negotiations Hit a Wall
Canadian Prime Minister Mark Carney reportedly attempted to initiate talks, but no discussions took place before the announcement. While Carney described previous talks as “constructive,” Trump’s remarks suggest a limited window for compromise, citing Canada’s long-standing tariffs on US agriculture.
Geopolitical Overhang
Ottawa’s recent steps toward recognising Palestinian statehood added a geopolitical layer to the negotiations. Trump said the move made talks “very hard,” though later clarified it was “not a deal breaker,” leaving uncertainty on how foreign policy might impact trade terms.
Market Implications
Agriculture & Dairy: Canadian agri-exports, especially dairy and poultry, are likely to face higher cost burdens and reduced competitiveness in the US market.
Auto & Manufacturing Supply Chains: Tariffs and transshipment levies could disrupt auto parts and secondary manufacturing sectors outside USMCA coverage.
FX Outlook: The Canadian dollar (CAD) faces downside risk on prolonged trade friction, while the US dollar (USD) could remain supported on safe-haven flows.
What to Watch
CAD/USD Reaction: Sustained pressure below 1.35 could trigger further weakness if tariffs remain in place.
Agriculture & Food Stocks: Canadian dairy and poultry producers may face margin compression; US peers could see short-term pricing power.
US Auto & Manufacturing Plays: Any spillover into USMCA-covered auto exports could add volatility to auto sector equities.
Next Negotiation Window: Watch for signals of renewed talks; a reversal or softening of tariffs could spark a relief rally in CAD and trade-exposed equities.
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