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...
Global markets were jolted out of a prolonged period of low volatility after a sharp risk-off move rippled across equities, bonds and currencies, driven by renewed geopolitical fears tied to Greenland and mounting stress in Japan’s bond market.
After weeks of steady gains and narrow trading ranges, investors were forced to reassess risk as President Donald Trumpescalated threats to impose tariffs on European allies in pursuit of control over Greenland, reigniting concerns of trade friction and capital outflows from US assets.
What Moved the Markets
US stocks: Benchmark indices fell more than 2%, marking one of the sharpest pullbacks in recent months
Dollar: Weakened against most major currencies
US Treasuries: 30-year yields climbed toward 5%
Gold: Rose to a record high, reflecting demand for safe havens
Volatility: The VIX Index surged to its highest level since November
The selloff ended an unusually calm stretch that had lulled many investors into positioning for continued low volatility.
Japan Adds to the Pressure
Market stress was amplified by a sharp selloff in Japanese government bonds, which pushed yields higher and unsettled global fixed-income markets. Japan’s bond rout added another layer of uncertainty to an already fragile risk backdrop, contributing to the simultaneous selloff in equities and bonds.
Reviving ‘Sell America’ Fears
The episode has revived concern that foreign investors could reduce exposure to US assets if trade tensions intensify — a risk last seen during the sharp volatility spike following Trump’s tariff announcements in April.
Hedge fund managers warn that political risk is once again demanding a premium, as investors reassess assumptions that geopolitical shocks will quickly fade.
Hedging Activity Picks Up
Signs of defensive positioning are emerging:
Options markets show increased bets on higher US Treasury yields
Portfolio managers are adding hedges against systemic risk, rather than isolated shocks
Safe-haven assets, particularly gold, continue to attract inflows
Some investors note that simultaneous equity and bond selloffs are often a warning signal of deeper market stress.
More Event Risk Ahead
Attention now turns to the US Supreme Court, which is set to hear arguments over Trump’s attempt to remove Federal Reserve Governor Lisa Cook. Analysts warn that any ruling perceived as undermining central bank independence could further pressure bond markets.
Is This a Regime Shift or Just Noise?
Despite the volatility spike, some strategists argue that geopolitical shocks often have their biggest impact early, before fading as economic realities reassert themselves. Markets have grown accustomed to Trump’s aggressive rhetoric, with many traders still leaning on the so-called “TACO trade” — buying dips on the assumption that extreme outcomes are unlikely.
Still, others caution that the combination of geopolitical tension, rising yields and fragile confidence leaves markets vulnerable to further shocks.
Investor Takeaway
A long period of calm has been forcefully disrupted
Geopolitics and policy risk are back in focus
Gold, volatility hedges and defensives are outperforming
Markets may remain choppy until clarity emerges on trade and policy direction
As one strategist put it, markets are now waiting for “the next shoe to drop” — and there may be more than one in the pipeline.
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