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.
China has signaled willingness to extend its trade truce with the United States, offering markets a degree of stability while setting clear limits on future tariff escalation.
Negotiations to Extend Trade Agreement
Beijing confirmed that trade teams from China and the US will negotiate an extension of the one-year agreementreached in late 2025.
The deal, initially agreed in Kuala Lumpur and formalised at a summit in Busan, included:
- Suspension of certain tariffs
- Easing of rare earth export restrictions
- Pause on investigations into China’s shipbuilding sector
The current arrangement is set to run until November 2026.
China Sets Boundaries on Tariff Levels
China indicated it is willing to tolerate US tariffs, but only within limits:
- Acceptable tariff level: ~30% ceiling
- Current effective rate: ~21% (after US court rulings)
This stance signals pragmatism from Beijing, while pushing back against attempts by the US to reintroduce higher Section 301 tariffs.
Strategic Deals Support Economic Ties
Recent discussions have also produced tangible economic outcomes, including:
- China’s agreement to purchase 200 aircraft from Boeing
- Establishment of new bilateral trade and investment councils
These measures aim to strengthen economic cooperation and reduce friction.
Market Reaction Turns More Positive
China’s CSI 300 Index trimmed earlier losses following the announcement, reflecting improved investor sentiment.
The move suggests markets are welcoming signs of policy stability between the world’s two largest economies.
Investor Takeaways
- China and the US are moving toward extending their trade truce, supporting market stability.
- Beijing is willing to accept tariffs, but caps them at around 30%, limiting downside risk.
- Trade tensions are easing, with cooperation in key sectors like aviation.
- Markets responded positively, with Chinese equities recovering losses.
- Reduced trade friction could support global growth and investor sentiment.
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