KUALA LUMPUR, March 19 (Bernama) -- Bursa Malaysia ended lower today due to late selling in selected heavyweights, particularly in the healthcare, utilities and financial services sectors and was also in sync with regional market weakness. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 9.10 points or 0.53 per cent to 1,720.71 from yesterday’s close of 1,729.81. The market bellwether opened 6.52 points lower at 1,723.29, and fluctuated between 1,719.93 and 1,737.12 throughout the day. Market breadth was negative with losers beating gainers 707 to 442. A total of 486 counters were unchanged, 1,131 untraded and 11 suspended. Turnover increased to 3.36 billion units worth RM4.96 billion from yesterday’s 3.33 billion units worth RM4.27 billion.
Global markets turned risk-off on Thursday as a sharp escalation in the US-Israel-Iran conflict sent oil prices soaring and heightened fears of stagflation, while central banks adopted a more hawkish tone.
Energy Shock Triggers Market Selloff
Oil prices surged after Iran accused Israel of targeting its South Pars gas field, followed by retaliatory threats against energy infrastructure across the Gulf.
Brent crude jumped above US$111 per barrel
US crude rose over 3% to US$99.39
Natural gas surged more than 5%
The escalation has raised concerns that the conflict is now directly impacting the global energy supply chain, rather than remaining a contained geopolitical event.
Equity Markets Decline Across Asia
Equity markets fell sharply across the region:
Japan’s Nikkei dropped 2.5%
South Korea equities fell 2.5%
MSCI Asia-Pacific ex-Japan declined over 1%
European futures slid more than 1.5%
Investors are increasingly concerned about stagflation risks, where rising energy prices drive inflation while slowing economic growth.
Dollar Strengthens as Safe-Haven Demand Rises
The US dollar remained firm, supported by both safe-haven demand and shifting monetary policy expectations.
The dollar index has risen 2.5% since the conflict began, as investors seek stability amid market volatility.
Meanwhile, the Japanese yen hovered near 160 per dollar, raising the risk of potential intervention by Japanese authorities.
Central Banks Turn Hawkish Amid Inflation Risks
Recent central bank signals suggest a shift toward tighter policy bias:
The Federal Reserve now signals only one rate cut this year
Markets are scaling back expectations for easing in 2026
The Reserve Bank of Australia has already raised rates
Upcoming decisions from the European Central Bank, Bank of England, and Bank of Japan will be closely watched for further guidance.
Policymakers face a difficult balancing act as higher energy prices fuel inflation, while tighter policy risks slowing economic growth.
Stagflation Risks Take Centre Stage
Strategists warn that markets are entering a more complex phase, where the conflict is no longer just geopolitical but macroeconomic in nature.
Higher oil prices could:
Push inflation higher
Erode consumer purchasing power
Weigh on corporate margins and growth
At the same time, interest rate hikes cannot resolve supply-side shocks, potentially intensifying economic slowdown risks.
Investor Takeaways
Oil prices have surged above US$110, signalling a significant energy supply shock.
Global equities are declining amid rising stagflation concerns.
The US dollar is strengthening, reflecting increased demand for safe-haven assets.
Central banks are adopting a more hawkish stance, reducing expectations for rate cuts.
Investors should monitor energy markets, geopolitical developments, and policy signals as key drivers of market direction.
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