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.
The US administration has secured a temporary legal win, allowing its 10% global tariffs to remain in force while appeals proceed. The ruling adds another layer of policy uncertainty for global trade, inflation, and corporate supply chains.
Tariffs Remain in Place Amid Legal Dispute
A US federal appeals court has allowed the government to continue enforcing the 10% tariffs introduced under Section 122 of the Trade Act of 1974, despite an earlier ruling that questioned their legality.
The court noted that the administration had made a credible case it could ultimately win, justifying the continuation of tariffs during the appeals process.
Key point: Tariffs will stay in effect for now, keeping pressure on global trade flows.
Unusual Legal Basis Raises Long-Term Questions
The case centers on the interpretation of “balance-of-payments deficits”, a condition required to justify tariffs under Section 122.
- The lower trade court argued the definition was too broad
- The appeals court suggested the lower court’s interpretation may have been too narrow
Key point: The legal foundation of these tariffs remains uncertain and could still be overturned.
Implications for Markets and Businesses
The continuation of tariffs has several implications:
- Trade costs remain elevated, affecting importers and global supply chains
- Ongoing uncertainty may delay corporate investment decisions
- The tariffs could complicate US trade negotiations with key partners
At the same time, the case is expected to eventually reach the Supreme Court, prolonging the policy overhang.
Macro Impact: Inflation and Policy Risk
Tariffs act as a quasi-tax on imports, potentially:
- Supporting higher inflation levels
- Limiting the scope for near-term rate cuts
- Increasing volatility across equities, currencies, and commodities
Key point: Trade policy is becoming a renewed driver of inflation risk.
Key Takeaways
- 10% global tariffs remain active, sustaining pressure on trade-sensitive sectors.
- Legal uncertainty persists, with the case likely heading to the Supreme Court.
- Tariffs could support inflation, influencing central bank policy paths.
- Companies exposed to global supply chains may face margin pressure.
- Markets may see intermittent volatility tied to legal and policy developments.
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