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...
President Donald Trump’s renewed push for Greenland, paired with fresh tariff threats against major European allies, has injected fresh uncertainty into global markets — yet investor reaction remains measured rather than panicked.
Market Reaction So Far
Initial price action reflects rising uncertainty, not crisis-level stress:
S&P 500 futures: ~-1%
VIX: +18.8%, signaling a jump in short-term volatility
Gold: modest gains as a hedge
US dollar: weaker versus euro and sterling
Treasury yields: edged higher, implying inflation concerns
Historically, moves of this magnitude are well within normal market noise, suggesting investors are assigning a low probability to extreme outcomes.
Why Markets Aren’t Panicking
Investors appear to be discounting worst-case scenarios for several reasons:
- Trump risk is familiarMarkets reacted far more sharply during earlier tariff announcements. Past episodes ended with manageable inflation, steady growth and resilient equities.
- The “TACO trade” mindsetSome investors believe Trump may soften or reverse course, whether due to political pressure, Congressional resistance or legal challenges.
- Possible upside for EuropeHigher European defence spending could support certain equity sectors, even if it raises long-term fiscal concerns.
- Extreme outcomes are hard to priceStructural shifts in the global order — NATO strain, geopolitical realignment — are complex and uncertain, leading markets to delay repricing until clarity emerges.
Longer-Term Risks Linger
While near-term moves are muted, the strategic implications are not trivial:
Risk of European trade retaliation
Potential weakening of NATO cohesion
Opportunity for China and Russia to exploit a divided West
Gradual global diversification away from US-centric trade, finance and defence structures
History shows markets often underreact initially to major geopolitical turning points, only repricing sharply once consequences become unavoidable.
Investor Perspective
Short-term: volatility rises, but markets remain functional
Medium-term: repeated shocks may slowly erode confidence
Long-term: outcomes range from status quo survival to structural global realignment
For now, investors appear to be choosing flexibility over conviction, acknowledging the risks without betting aggressively on a new world order.
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