KUALA LUMPUR, May 25 (Bernama) -- Bursa Malaysia closed lower on Monday as investors turned cautious, with profit-taking emerging in selected heavyweights, amid rising global bond yields and ahead of the US inflation release. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 4.17 points, or 0.24 per cent, to 1,708.50 from Friday’s close of 1,712.67. The benchmark index opened 1.24 points lower at 1,711.43 and moved between 1,705.94 and 1,713.50 throughout the session. Market breadth was negative, with losers outpacing gainers 619 to 419, while 565 counters were unchanged, 1,095 untraded and 59 suspended. Turnover fell to 3.06 billion units worth RM3.17 billion compared with 3.68 billion units worth RM3.58 billion on Friday.
Asian markets advanced sharply as renewed optimism over a US-Iran deal boosted risk sentiment, driving equities higher while oil prices fell significantly.
Equities Gain as Risk Sentiment Improves
The MSCI Asia-Pacific Index rose 1.2%, led by strong gains in Japan:
- Nikkei 225 +3% to record high
- Broad gains across Asia supported by lower inflation expectations
Meanwhile, US markets remained strong, with S&P 500 futures rising 0.7%, extending an eight-week winning streak.
Oil Prices Slide on Supply Recovery Hopes
Crude oil dropped sharply as prospects improved for reopening the Strait of Hormuz:
- Brent crude fell over 4% to ~US$99/barrel
- Signs of shipping activity resuming in the region
Lower oil prices are easing concerns over energy-driven inflation, a key overhang for global markets.
Dollar Weakens, Gold Gains
The US dollar declined against major peers, reflecting a shift back into risk assets.
- Gold +1.2%
- Benefiting from lower yields and easing inflation expectations
This suggests markets are beginning to price in potential policy easing ahead.
Bond Yields Decline Across Markets
Government bond yields fell across the region:
- Japan, Australia, and New Zealand yields moved lower
- Reflecting reduced inflation pressure and improving risk outlook
However, investors still expect policy tightening to remain in place near term.
Geopolitical Progress Remains Fragile
While progress has been made:
- US and Iran are close to a framework agreement
- A 60-day ceasefire extension is being discussed
Risks remain, as negotiations are ongoing and key disagreements persist, keeping volatility elevated.
Broader Market Drivers: AI and Inflation
Markets continue to balance:
- AI-driven growth optimism supporting equities
- Inflation and debt concerns keeping yields elevated
Investors are also watching upcoming US PCE inflation data, which will guide rate expectations.
Investor Takeaways
- Asian equities are rising, supported by easing geopolitical tensions.
- Oil prices fell sharply, reducing inflation pressure.
- Dollar weakness and gold gains reflect improving risk sentiment.
- Markets remain sensitive to US-Iran deal developments.
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