Malaysia’s market closed lower on March 2 as geopolitical tensions and surging oil prices pressured broader risk sentiment — but energy-linked counters surged. The FTSE Bursa Malaysia KLCI fell 0.96% to 1,700.21. Market Snapshot (March 2, 2026) FBM KLCI: 1,700.21 (-0.96%) FBM70: -1.30% FBM Small Cap: -0.98% FBM Emas: -1.03% Risk-off tone dominated — except in oil and gas. FBM KLCI Movers Top Gainer Petronas Chemicals Group Bhd (PCHEM) +13.00% to RM3.390 Other Gainers Petronas Dagangan Bhd +1.27% MISC Bhd +1.24% Press Metal Aluminium Holdings Bhd +1.12% RHB Bank Bhd +0.71% Top Loser Mr DIY Group M Bhd -7.26% Energy and commodity exposure dominated the gainers list. FBM70 Standouts Top Gainer Hibiscus Petroleum Bhd +18.13% Top Loser DRB-Hicom Bhd -8.20% Clear rotation into upstream oil producers. REIT Performance Top Gainer Tower Real Estate Investment Trust (TWRREIT) +1.67% Top Loser Al-Salam Real Estate Investment Trust (ALSREI...
Emerging-market assets came under pressure as escalating tensions involving Iran triggered a surge in oil prices and renewed demand for safe havens.
A broad gauge of developing-nation currencies fell 0.5%, marking a second straight session of declines, while emerging-market equities dropped as much as 1%, the sharpest fall in over two weeks.
Brent crude surged to its highest level in more than a year amid fears of supply disruption.
What’s Driving the Move
Key developments:
Rising geopolitical tension in Iran
Threat of disruption to the Strait of Hormuz
Brent crude jumping above US$70, with upside risk
US dollar and gold strengthening
The Strait of Hormuz handles roughly 20% of global oil flows, making it a critical chokepoint for energy markets.
According to Bloomberg Economics, oil could surge toward US$108 per barrel if the strait were effectively closed.
Money Master Take
This is an oil-driven macro shock — and EM is the first casualty.
1. Oil Importers Are Most Vulnerable
Strategists at Oversea-Chinese Banking Corp. flagged that countries heavily reliant on oil imports may underperform.
Likely currency pressure candidates:
India
Philippines
Taiwan
Thailand
South Korea
Higher oil prices widen current-account deficits and worsen inflation dynamics.
2. Stronger Dollar Adds Secondary Pressure
As risk aversion rises:
US dollar strengthens
Capital flows retreat from EM
Local currencies weaken further
This compounds inflation concerns and limits central bank flexibility in emerging markets.
The combination of higher oil and stronger dollar historically produces sharp EM drawdowns.
3. Sector Rotation Within Asia
Winners:
Energy producers
Shipping stocks
Defense names
Gold-linked counters
Losers:
Airlines
Travel-related stocks
Growth names
This reflects a classic geopolitical risk repricing.
4. Is This Structural or Temporary?
Short term:
Risk assets reprice quickly
Volatility spikes
Liquidity thins
Medium term:
Sustainability depends on duration of conflict
Oil trajectory is the key variable
If oil stabilizes below US$80–85, EM damage may remain contained.
If Brent accelerates toward US$100+, inflation and rate risks return aggressively.
Bottom Line
EM currencies and stocks are under pressure from oil shock fears.
Oil import-dependent economies face higher vulnerability.
Safe-haven flows are strengthening the dollar and gold.
Market reaction currently reflects volatility shock, not yet structural crisis.
The decisive factor now is whether energy supply disruption becomes prolonged.
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