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.
Summary:
Two of the European Central Bank’s (ECB) top policymakers — Vice President Luis de Guindos and Chief Economist Philip Lane — indicated little urgency to adjust monetary policy, saying inflation risks are now balanced and current rates remain appropriate.
Key Takeaways
“Inflation risks are balanced,” said Guindos, citing price trends that align with projections. “Price stability could be somehow guaranteed,” he added, suggesting no immediate need for further cuts.
Lane echoed this sentiment, saying policymakers face a choice between holding steady or cutting slightly if downside risks intensify.
Both officials stressed a data-dependent and cautious approach, with Guindos noting the ECB remains wary of “very high uncertainty,” despite a new US-EU trade deal.
Policy Outlook
After eight rate cuts over the past year, most ECB policymakers view policy settings as broadly appropriate.
ECB staff forecasts inflation to ease to 1.7% in 2026, then stabilise near 1.9% by 2027.
Growth is expected to strengthen, supported by fiscal expansion in Germany and other EU economies.
Lane noted that:
“A rise in downside risks would strengthen the case for slightly lower policy rates, while upside risks would argue for keeping rates unchanged.”
Market Implications
The ECB’s balanced tone reinforces market expectations for an extended pause in rate adjustments through year-end.
European bonds and the euro could remain steady as traders price in a prolonged “wait-and-see” stance.
With inflation cooling and growth momentum building, investors may look toward fiscal policy rather than further monetary easing to drive the region’s next leg of recovery.
Bottom Line:
The ECB is in no rush to act, signalling a period of monetary stability. While inflation is near target, uncertainty around global trade and growth keeps the central bank on alert — favouring flexibility over forward guidance.
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