KUALA LUMPUR – Bursa Malaysia opened marginally higher but declined within minutes of trading, reflecting investors’ concerns about a potential interest rate hike by the United States Federal Reserve (Fed), a dealer said.
The Fed is widely expected to deliver a 75 basis-point interest-rate hike at the end of its two-day policy meeting today.
At 9.15am, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 2.51 points to 1,461.18 from yesterday’s close of 1,463.69.
The benchmark index opened 0.44 points better at 1,464.13.
On the broader market, losers led gainers 161 to 129, while 222 counters were unchanged, 1,778 untraded and 20 others suspended.
Turnover stood at 176.28 million units worth RM62.93 million.
In a research note today, Malacca Securities Sdn Bhd said investors are also preparing for more volatility over the near term ahead of the second quarter (Q2 2022) US gross domestic product (GDP) data, which will be released tomorrow.
“Hence, stocks with defensive characteristics may be in focus. As for commodities, oil benchmark Brent crude and crude palm oil (CPO) prices stabilised around US$104 (RM463) and RM3,700, respectively, but we expect the CPO price may weaken amid returning exports from Indonesia.
“Sector-wise, the real estate investment trust and consumer sectors may see resilient movement as defensive stocks amid the market volatility,” it said.
The brokerage added that selected technology stocks might take a beating ahead of the possible interest rate hike in the US, tracking the pullback in the Nasdaq overnight.
Among the Bursa heavyweights, Maybank, Public Bank and IHH Healthcare were flat at RM8.79, RM4.60 and RM 6.43, respectively, while Petronas Chemicals eased half-a-sen sen to RM8.57 and CIMB Group gave up 1 sen to RM5.19.
Of the actives, Serba Dinamik and Sapura Energy were flat at 11 sen and 4.5 sen, respectively, while Metronic Global, Pertama Digital and Destine advanced half-a-sen each to 10.5 sen, 88 sen and 11 sen, respectively.
On the index board, the FBM Emas Index shed 14.24 points to 10,361.51, the FBM Emas Shariah Index slipped 20.50 points to 10,401.49, the FBMT 100 Index slid 15.70 points to 10,118.15, the FBM ACE dipped 23.82 points to 4,705.88, and the FBM 70 was 12.18 points lower at 12,391.50.
Sector-wise, the Plantation Index declined 6.57 points to 6,843.19, the Financial Services Index trimmed 2.12 points to 16,483.90 and the Industrial Products and Services Index lessened 0.69 of-a-point to 176.71, while the Energy Index expanded 3.09 points to 644.17.
Meanwhile, the ringgit opened higher against the US dollar amidst renewed buying interest for the domestic unit.
At 9.18am, the local currency rose to 4.4550/4600 versus the greenback from yesterday’s close of 4.4570/4585.
SPI Asset Management managing partner Stephen Innes expects the US dollar/ringgit pair to trade in an extremely tight range ahead of the Fed’s Federal Open Market Committee’s decision on the US’ economic policy later today.
“And while 75 basis points hike is priced in, the market remains divided on the US Federal Reserve’s forward guidance.
“If Fed chair Jerome Powell maintains his aggressive inflation-fighting stance, the ringgit could weaken against the backdrop of widening US dollar/ringgit interest rate differentials,” he said.
Meanwhile, the local currency advanced against the Singapore dollar to 3.2069/3109 from yesterday’s close of 3.2104/2119, appreciated versus the Japanese yen to 3.2497/2536 from 3.2628/2644 yesterday and strengthened vis-a-vis the euro to 4.5183/5233 from 4.5341/5356 previously.
However, the ringgit fell versus the British pound to 5.3652/3712 from 5.3533/3551 yesterday. – Bernama, July 27, 2022
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