KUALA LUMPUR, May 11 (Bernama) -- Late selling pressure dragged Bursa Malaysia into negative territory at the close, reversing earlier gains as profit-taking in heavyweight banking and transportation counters dampen overall market sentiment. At 5 pm, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) eased 2.75 points to 1,745.31 from Friday’s close of 1,748.06. The benchmark index, which opened 5.94 points firmer at 1,754.0, moved between 1,744.99 and 1,754.0 during the trading session. Market breadth was positive with gainers leading losers 562 to 558. A total of 636 counters were unchanged, 897 untraded, and 12 suspended. Turnover increased to 4.20 billion units worth RM3.17 billion compared with 3.31 billion units worth RM3.00 billion on Friday.
Manufacturing activity across Asia remained in expansion territory in March, but signs of slowing momentum are emerging as rising energy prices from the Middle East conflict begin to weigh on the region.
Growth Holds, but Momentum Weakens
S&P Global data showed that several economies, including South Korea, Malaysia, and Thailand, recorded improved factory activity.
- Thailand led the region with a PMI of 54.1
- Malaysia returned to expansion after a prior contraction
- South Korea also showed strong improvement
However, the broader ASEAN Manufacturing PMI slipped to 51.8, down from February’s 53.8, marking the slowest pace of expansion since September.
While still above the 50-point threshold, the data highlights a clear loss of growth momentum.
War-Driven Energy Shock Weighs on Industry
The slowdown comes as the US-Israel conflict with Iran disrupts energy markets, particularly via the Strait of Hormuz, a key global oil route.
Oil prices have surged above US$100 per barrel, increasing input costs for manufacturers, especially those reliant on oil-based raw materials.
Countries such as Vietnam, Indonesia, and Taiwan saw PMI readings ease, reflecting the early impact of higher costs and supply chain disruptions.
China Shows Resilience Amid External Pressures
Despite the challenging backdrop, China’s manufacturing sector returned to expansion in March, supported by improvements in both industrial production and services activity.
This suggests that domestic demand and policy support are helping offset external headwinds, at least in the near term.
Governments Brace for Worst-Case Scenarios
Authorities across Asia are taking precautionary steps to manage potential fallout from prolonged energy disruptions.
- South Korea has established an emergency economic task force
- The Philippines declared a national emergency
- Japan is reviewing its energy supply chains
- Narendra Modi warned of unprecedented economic challenges
These actions reflect growing concerns that prolonged conflict could trigger inflation, weaken growth, and disrupt supply chains.
Outlook: Expansion Intact, Risks Rising
While Asia’s manufacturing sector remains resilient, the outlook is increasingly tied to geopolitical developments and energy market stability.
A prolonged conflict could erode margins, dampen demand, and slow industrial activity further.
Investor Takeaways
- Asia manufacturing remains in expansion, but growth momentum is slowing.
- Rising oil prices above US$100 are increasing input costs and inflation risks.
- ASEAN PMI fell to 51.8, signalling weaker but still positive activity.
- China shows resilience, supported by domestic demand and policy support.
- Governments are preparing for worst-case energy disruptions, highlighting rising macro risks.
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