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.
Global markets are shifting focus from inflation to growth risks, as escalating Middle East tensions push oil prices higher and raise concerns about a potential stagflationary environment.
Oil Surge Raises Recession Concerns
Brent crude climbed to US$116 per barrel, extending gains amid continued disruption in the Middle East.
Analysts warn that if the conflict persists:
- Oil could surge toward US$200 per barrel in a worst-case scenario
- Prolonged supply disruption could trigger global economic slowdown
The ongoing closure of the Strait of Hormuz remains a key risk to global energy supply.
Bond Markets Rally as Growth Fears Rise
Government bonds strengthened as investors reassessed the economic outlook:
- US Treasury yields declined across the curve
- 2-year yield fell to 3.89%
- 10-year yield eased to ~4.39%
Markets are now pricing in a lower probability of rate hikes, with expectations for tightening in 2026 reduced to 25% from 35%.
Shift from Inflation to Growth Narrative
Earlier concerns centred on inflation from rising oil prices, but sentiment is now shifting toward growth deterioration.
Strategists highlight increasing risks of:
- Slowing global demand
- Pressure on corporate earnings
- A potential stagflation scenario
Equities Mixed as Sentiment Remains Fragile
Market performance was uneven:
- S&P 500 futures rose 0.4%, signalling tentative stabilisation
- MSCI Asia Pacific Index fell 2.1%, hitting year-to-date lows
- European equities traded flat
This reflects ongoing uncertainty and divergence in regional sentiment.
Safe Havens Gain Support
Defensive assets saw renewed demand:
- Japanese yen strengthened
- Gold advanced, supported by dip-buying
Meanwhile, cryptocurrencies showed resilience, with Bitcoin and Ether posting gains.
Outlook: Markets Brace for Prolonged Volatility
Investors are increasingly pricing in a scenario of:
- Persistently high energy prices
- Slower economic growth
- Continued geopolitical uncertainty
Market direction will depend heavily on whether the conflict de-escalates or prolongs into the second quarter.
Investor Takeaways
- Brent crude at US$116 is raising concerns about global growth and stagflation.
- Bond markets are rallying as rate hike expectations decline.
- Investors are shifting focus from inflation to recession risks.
- Equities remain fragile and regionally mixed amid uncertainty.
- Prolonged conflict could drive further volatility across asset classes.
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