KUALA LUMPUR, June 12 (Bernama) -- Selected blue-chip counters trading at attractive valuations helped Bursa Malaysia close higher on Friday, despite cautious market sentiment driven by developments in West Asia, volatility in crude oil prices and uncertainty over the global interest rate outlook. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 4.10 points or 0.24 per cent to 1,683.63 compared with Thursday's close of 1,679.53. The key index opened 5.34 points stronger at 1,684.87 earlier today and moved between 1,679.72 and 1,685.39 throughout the session. Market breadth was negative, with losers leading gainers 533 to 479, while 561 counters were unchanged, 1,130 untraded and 33 suspended. Turnover fell to 2.79 billion units worth RM2.31 billion from 3.32 billion units worth RM2.88 billion yesterday.
Asian equities rallied sharply as optimism over a potential Middle East peace deal triggered a broad risk-on move, with falling oil prices easing inflation concerns and supporting equities.
Equity Markets Rally on Diplomatic Breakthrough Hopes
Regional markets extended gains alongside global equities:
- Nikkei 225 +4.3%
- Kospi +8.3%
- Australia’s resource-heavy stocks +1.8%
The rally reflects renewed investor confidence, supported by expectations that a peace agreement could be reached soon.
Oil Prices Drop, Easing Inflation and Policy Risks
Energy markets reacted strongly to the improving outlook:
- Brent crude ~US$89 per barrel
- West Texas Intermediate crude ~US$86 per barrel
Key driver:
Stocks rose because lower oil prices reduce inflation and Federal Reserve tightening risks, improving the outlook for interest rates and valuations.
Global Markets Join Risk-On Rally
Wall Street posted strong gains overnight:
- Nasdaq Composite +2.5%
The rally was further supported by the record IPO of SpaceX, highlighting strong appetite for growth assets.
Bond Yields and Dollar Decline
As inflation concerns eased:
- US Treasury yields fell sharply
- Dollar weakened, with index near 99.8
Markets scaled back expectations of further tightening by the Federal Reserve:
- Rate hike probability dropped to 36% (from 51%)
Macro Signals Remain Mixed
- US producer prices rose, reflecting earlier energy spikes
- Labour market remains resilient
However, falling oil prices may help ease forward inflation pressures.
Investor Takeaways
- Asian stocks surged, supported by falling oil prices and easing inflation fears.
- Lower oil reduces Fed tightening risks, improving equity valuations.
- Bond yields and the dollar declined, reinforcing risk-on sentiment.
- The AI and growth theme remains strong, supported by liquidity and expectations.
- Markets remain sensitive to geopolitical developments and oil price trends.
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