KUALA LUMPUR, July 3 (Bernama) -- Bursa Malaysia ended Friday’s trade with a bounce on the back of a rally in banking stocks as investor sentiment improved following softer-than-expected US labour market data. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the recovery in heavyweight financial counters provided the main support for the benchmark index, reflecting increased risk appetite after concerns over further US monetary tightening eased. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) jumped 17.22 points to 1,679.05 from Thursday's close of 1,661.83. The benchmark index opened 3.90 points higher at 1,665.73 and moved between 1,662.91 and 1,682.62 throughout the session. The market breadth was positive, with gainers trouncing decliners 633 to 372, while 533 counters were unchanged, 1,112 untraded, and 12 suspended.
Asian equities declined for a fourth straight session as rising US bond yields and persistent inflation fears weighed on sentiment, with investors turning cautious ahead of key earnings from Nvidia.
Rising Yields Pressure Global Equities
Markets came under pressure as US Treasury yields surged:
- 10-year yield hit 4.69% (16-month high)
- 30-year yield climbed to 5.20% (highest since 2007)
The sharp move reflects expectations that the Federal Reserve may resume rate hikes, driven by war-related inflation pressures.
Higher borrowing costs are weighing on equity valuations, particularly in growth sectors.
Asian Markets Extend Losing Streak
The MSCI Asia-Pacific ex-Japan Index fell 0.7%, marking its fourth consecutive decline.
Regional performance was broadly weak:
- Nikkei 225 -1.5% (5th straight loss)
- Kospi -1.7%
- Hang Seng Index -0.6%
China’s market was relatively stable, reflecting policy support expectations.
Nvidia Earnings Seen as Key Market Catalyst
Investor focus is now firmly on Nvidia’s earnings, which could shape near-term market direction.
- Revenue projected to rise ~80% to US$79 billion
- Expectations remain extremely high after previous strong results
Markets are looking for confirmation that the AI-driven growth cycle can offset rising interest rate pressures.
Oil Stays Elevated Amid Ongoing Conflict
Energy markets remain tight:
- Brent crude above US$110 per barrel
- Strait of Hormuz effectively closed, raising supply concerns
Geopolitical tensions continue to fuel inflation risks, complicating central bank policy outlooks.
Semiconductor Supply Risks Emerge
Additional pressure came from South Korea:
- Samsung Electronics shares fell after plans for an 18-day strike
- Raises concerns over global chip supply disruptions
Dollar Strength Weighs on Risk Assets
The US dollar strengthened to a six-week high, reflecting:
- Safe-haven demand
- Rising yields
Meanwhile:
- Euro near recent lows
- Yen remains weak despite past intervention
Gold declined 0.4%, pressured by a stronger dollar.
Investor Takeaways
- Asian stocks extended losses, pressured by rising bond yields and inflation fears.
- US Treasury yields at multi-year highs are weighing on equity valuations.
- Nvidia earnings are a key catalyst, testing whether AI can sustain market momentum.
- Oil above US$110 continues to drive inflation and policy uncertainty.
- Investors should monitor rates, AI earnings, and geopolitical risks closely.
Comments
Post a Comment