KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
Summary
Markets and diplomats were bracing for escalation — then came the reversal. Within hours of arriving in Davos, US President Donald Trump abruptly softened his stance on Greenland, shelving tariff threats against Europe and ruling out the use of force. The pivot eased market stress but underscored how policy volatility has become a central risk factor for investors.
What Changed — And Why
Trump’s about-face followed intense back-channel talks with European leaders and NATO officials, including Mark Rutte and German Chancellor Friedrich Merz. Europe presented a united front, pairing security concessions with warnings about damage to NATO unity if tensions spiraled.
After meeting Rutte, Trump announced he had formed a “framework of a future deal” on Greenland and called off planned tariffs on European nations that had been set to begin next month.
What the Emerging Framework Looks Like
While details remain fluid, officials familiar with discussions say negotiations may center on:
Expanded US access to military bases in Greenland
Greater European involvement in Arctic security
US right of first refusal on Greenland’s critical mineral investments, aimed at blocking China and Russia
In return, the US would remove tariff threats from the table
Trump described the framework as “really fantastic,” though the White House offered few specifics, emphasizing that talks are ongoing.
Why Markets Cared
Just days earlier, Trump had refused to rule out military force and threatened tariffs of up to 25% on eight European countries, triggering sharp selloffs across global markets. The Davos pivot reversed that narrative.
Key market signal: investors again leaned into the “TACO trade” — the belief that Trump Always Chickens Out when market stress intensifies.
Europe’s Relief — And Lingering Unease
European leaders welcomed the de-escalation but remain cautious. Denmark’s foreign minister said the day “ended on a better note,” while EU leaders still convened an emergency meeting to assess longer-term damage to trans-Atlantic trust.
NATO confirmed that talks will now focus on ensuring Russia and China never gain a foothold — economically or militarily — in Greenland.
Inside the Davos Tension
Despite the softer tone, Trump used his World Economic Forum speech to sharply criticize European allies, rebuke Denmark, and warn that NATO members should support US strategic interests.
The reaction in the room was muted — a mix of nervous laughter, light applause, and visible discomfort — reflecting strained relations beneath the surface calm.
Investor Takeaway
Tariff risk receded — temporarily
Geopolitical volatility remains elevated
Markets are increasingly headline-driven, not fundamentals-driven
Policy reversals are becoming part of the risk premium
The Greenland episode shows how quickly markets can swing from panic to relief, and why investors may need to stay nimble as geopolitics and policy uncertainty dominate the 2026 outlook.
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