KUALA LUMPUR, Dec 12 (Bernama) -- Bursa Malaysia’s key index closed higher today on bargain hunting, in line with positive investor sentiment across regional markets, consolidating at its highest level in more than two months — a level last seen on Oct 2, 2025. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 12.42 points, or 0.76 per cent, to 1,637.81, compared with Thursday’s close of 1,625.39. The benchmark index opened 2.83 points lower at 1,622.56, thereafter edged down to an early low of 1,622.03, before staging an uptrend to an intraday high of 1,640.36 in late trading. Market breadth was positive, with gainers trouncing decliners at 743 versus 387. Another 530 counters were unchanged, 1,108 untraded, and 16 suspended. Turnover increased to 3.09 billion units worth RM2.46 billion from 2.99 billion units worth RM2.35 billion on Thursday. Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the FBM KLCI ended higher on continued...
US stocks and Treasuries fell on Monday, halting a four-day rally as investors grew cautious ahead of the Federal Reserve’s final policy meeting of the year. While a quarter-point rate cut is widely expected, traders are increasingly concerned about how many cuts will follow in 2026.
The S&P 500 slipped 0.3%, pulling back after closing near a record high last week. A wave of dealmaking failed to lift sentiment — notably overshadowed by President Donald Trump’s warning that Netflix’s US$72 billion bid for Warner Bros Discovery may raise antitrust issues. Meanwhile, Paramount Skydance launched a hostile counteroffer, adding uncertainty to the sector.
Stocks have rallied in recent weeks after several Fed officials signalled support for a third straight rate cut on Wednesday. But questions over the pace of easing next year, combined with doubts about the durability of the AI-driven market surge, weighed on risk appetite.
Policy Uncertainty Builds
“Expectations for a quarter-point rate cut have been cemented,” said Ian Lyngen of BMO. “But this is set to be one of the most contentious rate decisions in recent history.”
Kevin Hassett, a leading candidate to replace Jerome Powell as Fed Chair, said the central bank should avoid setting a path for rates in advance, calling it “irresponsible” to forecast the next six months given the uncertain data backdrop.
Divisions within the Fed have widened as policymakers debate whether inflation remains too high. A lack of fresh data during the government shutdown has only intensified disagreements. Money markets now price two Fed cuts in 2026, down from three as recently as last week.
Evercore ISI’s Julian Emanuel said a divided FOMC will make any forward guidance “far less credible.”
Treasuries extended losses, with the 10-year yield rising to 4.17%, after US bonds posted their worst week in eight months.
Bond Market Focus Shifts to 2026
Morgan Stanley Wealth Management CIO Lisa Shalett said investors must now prepare for a regime shaped by fiscal dominance, where government spending becomes a more powerful market force than Fed policy. She warned of:
a persistently steep yield curve
10-year yields above 4%
higher inflation and wider term premiums
potential US dollar weakness
She noted that this environment increases the need for real assets, international equities and alternatives.
Europe also weakened, with bond markets under pressure after ECB official Isabel Schnabel signalled European rates may have bottomed.
Deutsche Bank strategist Jim Reid expects Powell to stress that the bar for more cuts in early 2026 is “high,” effectively signalling a pause after this week’s move.
Risk Appetite Still Intact for 2026
Despite short-term caution, most global allocators remain constructive on next year. Interviews with 39 investment managers in the US, Europe and Asia show a broad expectation of a risk-on environment in 2026, supported by resilient growth, ongoing AI development, and policy support.
BNP Paribas Asset Management’s Fabien Benchetrit said he remains bullish on 2026 but won’t raise equity exposure in December due to thin year-end liquidity. He expects AI investment themes to shift from heavy capex in 2025 to clear earnings and productivity gains in 2026.
Asia Highlights
Mainland Chinese shares led regional gains after the Communist Party’s Politburo named domestic demand its top priority for 2026.
In Japan, the yen weakened after a magnitude-7.6 earthquake struck offshore. Japanese government bond yields rose across the curve after data confirmed the economy contracted in the September quarter, supporting the need for Prime Minister Sanae Takaichi’s stimulus package. The figures complicate the Bank of Japan’s upcoming decision, but analysts say they are unlikely to derail its gradual tightening path.
Key Takeaways
S&P 500 fell 0.3% as markets turned cautious ahead of the Fed meeting.
A rate cut is expected, but traders are increasingly worried the Fed will cut less aggressively in 2026.
Antitrust concerns over Netflix’s bid for Warner Bros weighed on sentiment; Paramount Skydance launched a rival bid.
US bonds weakened, with the 10-year yield rising to 4.17%.
Fed officials remain deeply divided, and guidance may be less credible.
Investors are shifting attention to fiscal dominance and long-term inflation risks.
Global managers remain bullish on 2026 but are hesitant to deploy more capital in thin December markets.
Chinese markets rose on domestic-demand priorities; Japanese assets fluctuated after a major earthquake.
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