KUALA LUMPUR, Nov 5 (Bernama) -- Bursa Malaysia closed higher, buoyed by Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent, alongside positive cues from Wall Street. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 19.30 points, or 1.19 per cent, to 1,635.86 from Wednesday’s close of 1,616.56. The benchmark index opened 6.72 points higher at 1,623.28, and fluctuated between an intraday high of 1,642.44 and a low of 1,622.62 during the trading session. However, market breadth was negative, with losers outnumbering gainers 723 to 497, while 466 counters were unchanged, 1,075 untraded and 10 suspended. Turnover rose to 3.74 billion units valued at RM3.61 billion compared with yesterday’s 2.81 billion units valued at RM2.57 billion.
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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