KUALA LUMPUR, March 30 (Bernama) -- Bursa Malaysia’s benchmark index closed lower today, in line with most regional markets, as investors adjusted their risk exposure amid spiralling oil prices driven by the ongoing West Asia conflict, now in its second month. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) retreated by 24.75 points or 1.44 per cent to 1,687.90 from Friday’s close of 1,712.65. The market bellwether opened 10.57 points weaker at 1,702.08 and fluctuated between 1,682.79 and 1,702.38. The broader market was bearish, with decliners thumping advancers 956 to 371. A total of 373 counters were unchanged, 1,042 untraded and 134 suspended. Turnover expanded to 3.98 billion units worth RM4.85 billion from last Friday’s 2.97 billion units worth RM3.25 billion.
Euro is on track for its worst quarterly performance since 2024, as rising oil prices and geopolitical tensions expose Europe’s structural vulnerability to energy imports.
Currency Weakness Accelerates on Oil Shock
The euro has declined:
- ~2% this quarter
- ~2.5% in March, the steepest monthly drop since July
It now trades near US$1.15, reversing sharply from levels above US$1.20 earlier this year.
Analysts warn the currency could weaken further toward US$1.13 in the near term.
Energy Dependence Weighs on Europe
The selloff reflects Europe’s heavy reliance on imported energy:
- Oil prices have surged above US$115 per barrel
- The Strait of Hormuz disruption is tightening supply
Unlike the US, which benefits as a net energy producer, Europe faces:
- Higher inflation
- Weaker economic growth
Policy Outlook Turns Hawkish — But Growth Risks Persist
Markets are now pricing:
- Three interest rate hikes in 2026
- A sharp reversal from expectations of rate cuts just weeks ago
However, unlike typical cycles, higher rates are not supporting the euro, as growth concerns dominate.
Investor Sentiment Turns Bearish
Options markets signal rising pessimism:
- Demand for downside protection hit a four-year high
- Bearish bets vs safe-haven currencies (yen, Swiss franc) dominate
- Long-term bullish positioning has faded to neutral
This reflects a shift from confidence to caution within weeks.
Divergence Across Currency Pairs
While broadly weak, the euro shows relative strength against some peers:
- Investors are bullish vs the British pound
- Suggests relative positioning rather than outright pessimism
Outlook: Macro Risks to Dominate
The euro’s trajectory will depend on:
- Oil price stabilisation
- Resolution of Middle East tensions
- Europe’s ability to manage inflation without derailing growth
Absent improvement, the currency may remain under pressure.
Investor Takeaways
- The euro is heading for its worst quarter since 2024, down ~2%.
- Energy dependence is a key vulnerability amid rising oil prices.
- Markets now expect rate hikes, but growth risks limit currency support.
- Bearish positioning has surged, with strong demand for downside protection.
- Near-term outlook remains fragile, with potential downside toward US$1.13.
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