KUALA LUMPUR – Bursa Malaysia opened lower today, tracking the overnight heavy fall of the United States (US) stocks and government bonds, ahead of consumer price data on Friday, as investors were expecting high US inflation print.
The hawkish sentiment was also contributed by European Central Bank’s (ECB) move to keep the door open for an extra-large interest rate rise in September, dealers said.
At 9.05am, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 10.68 points to 1,499.03 from yesterday’s close of 1,509.71.
The benchmark index opened 4.03 points lower at 1,505.68.
On the broader market, losers thumped gainers 244 to 66, while 182 counters were unchanged, 1,782 untraded and 22 others suspended.
Turnover stood at 98.30 million units worth RM77.13 million.
Malacca Securities Sdn Bhd said the FBM KLCI slumped for the sixth straight session amid regional weakness, marking its longest losing streak since January 2022 despite the stronger retail sales recorded in April 2022, coupled with improved unemployment rate which dipped below 4.0.
"Investors may stay cautious, given the heavy selling pressure on Wall Street and European stock exchanges as ECB increased its interest rate by 50 basis points, translating into further volatility on the local exchange over the near term," it said.
On the commodity markets, the brokerage firm noted Brent oil price remained firm above the US$120 per barrel mark, while crude palm oil price fell, hovering around RM6,250 after Indonesia launched an export acceleration scheme.
“As for sector focus, given the above setup, the technology sector could be pressured as the Nasdaq fell below the key 12,000 level.
“For defensive purposes, investors may lookout for trading opportunities within the consumer, REITs and banking sectors over the near term,” it added.
Among the heavyweights, Maybank eased one sen to RM8.79, Public Bank and CIMB shed five sen each to RM4.52 and RM5.02, respectively, Petronas Chemicals declined eight sen to RM9.56, and IHH Healthcare slid three sen to RM6.37.
Of the actives, Genting Bhd fell 20 sen to RM5, Top Glove eased three sen to RM1.19, Serba Dinamik edged up half-a-sen to 11 sen, while LGMS gained two sen to 73.5 sen, and Pertama Digital was flat at 86.5 sen.
On the index board, the FBM Emas Index was 67.18 points lower at 10,774.50, the FBM Emas Shariah Index slipped 66.58 points to 11,042.17, the FBM 70 declined 58.68 points to 13,167.51, the FBM ACE trimmed 26.04 points to 5,143.90, and the FBMT 100 Index decreased 67.90 points at 10,466.60.
Sector-wise, the Financial Services Index dropped 74.03 points to 16,447.68, the Plantation Index shed 41.37 points to 7,624.0, and the Industrial Products and Services Index was 1.26 point easier at 192.78.
Meanwhile, the ringgit opened lower against the US dollar today, nearing a 28-month low that was recorded during the first Movement Control Order in 2020 amidst economic recovery.
At 9am, the local currency stood at 4.3975/4010 versus the US dollar from yesterday’s close of 4.3420/3940.
The ringgit was traded at RM4.3942 on April 21, 2020.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit is expected to remain weak today as market players continue to place high priority over major central banks’ actions.
“The rising US dollar is inevitable from a technical perspective as the US Dollar Index has surpassed the 103 points,” he said.
The US dollar rose to fresh three-week highs, above 103 points, and is expected to retest year-to-date high of 105.005.
He said the European Central Bank has clearly communicated its intention to raise benchmark interest and to begin reducing its Asset Purchases Programme in July to combat soaring inflation.
Meanwhile, SPI Asset Management managing partner Stephen Innes expects the ringgit to struggle, given the backdrop, but the local unit could be cushioned by higher energy prices.
The ringgit was traded higher against a basket of major currencies.
The local note inched up against the British pound to 5.4956/4999 from Thursday’s close of 5.4992/5017, improved against the Singapore dollar to 3.1834/1864 from 3.1939/1956.
It also strengthened against the Japanese yen to 3.2817/2846 from 3.2896/2914 and appreciated against the euro to 4.6715/6752 from 4.7060/7082 previously. – Bernama, June 10, 2022
