KUALA LUMPUR – The ringgit appreciated against the US dollar this morning following the United States Federal Reserve’s (Fed) encouraging move to slow the pace of its interest rate hikes during its recent meeting.
At 9am, the ringgit strengthened to 4.2280/2350 versus the greenback compared with 4.2655/2700 at Tuesday’s close.
SPI Asset Management managing partner Stephen Innes said the Fed is nearing the end of its aggressive rate-hike cycle as inflation in the US has subsided.
Yesterday, the Fed raised its interest rate by 25 basis points as expected, but hinted that continued monetary policy tightening may be needed before the central bank takes a pause on its fight against inflation.
“The Fed was less hawkish than expected, with chairman Jerome Powell’s guidance eliminating one big hurdle for ringgit appreciation.
“Now local traders will be gauging China’s post-reopening economic recovery for their next move,” said Innes.
The latest economic data from China was mixed, with its manufacturing purchasing managers index (PMI) showing a mild improvement in January although the reading remained below 50, indicating a contraction.
The Caixin PMI index stood at 49.2 in January compared to December’s 49.0, while the manufacturing PMI rose to 50.1 during the month from 47.0 in December, according to the country’s National Statistics Bureau.
At home, the ringgit traded mostly lower against a basket of major currencies, except versus the British pound where it increased to 5.2406/2493 from 5.2559/2615 at Tuesday’s close.
The local note depreciated against the Singapore dollar to 3.2406/2462 from Tuesday’s 3.2386/2425, eased vis-a-vis the Japanese yen to 3.2913/2970 from 3.2713/2750 earlier, and was lower against the euro at 4.6584/6661 from 4.6187/6236 previously.
Bursa rebounds on bargain hunting
Meanwhile, Bursa Malaysia rebounded from the strong broad-based sell-down on Tuesday to open higher this morning, supported by bargain-hunting activities, a dealer said.
At 9.05am, the benchmark FTSE Bursa Malaysia KLCI advanced 5.93 points to 1,491.43 from Tuesday’s close of 1,485.50.
The key index opened 3.32 points stronger at 1,488.82.
Market breadth is also positive with gainers leading losers 282 to 129, while 284 counters were unchanged, 1,478 untraded, and 11 others suspended.
Turnover amounted to 265.63 million units worth RM157.99 million.
The market was closed yesterday for the Federal Territory Day public holiday.
Rakuten Trade Sdn Bhd vice-president of Equity Research, Thong Pak Leng, said the benchmark index fell below 1,490 on Tuesday due to the market uncertainty brought on by the recent Fed meeting.
“However, we reckon bargain-hunting activities would return, thus expect the index to trend in the 1,490-1,500 range today, and the tech sector to see a strong recovery.
“Meanwhile, crude oil prices weakened on higher inventory data as Brent crude declined to US$83 (RM351) per barrel,” he said in a note today.
Globally, Thong said Wall Street recovered strongly following the Fed’s 25-basis-points hike, as the Dow Jones Index Average added seven points and the Nasdaq jumped by 232 points with the US 10-year yield easing to below 3.42%.
“Regionally, Hong Kong’s equities also rebounded, buoyed by tech stocks as traders were betting on the Fed’s less aggressive rate hike, pushing the Hang Seng Index 230 points higher to close above the 22,000 level,” he added.
Back home, Bursa heavyweights Press Metal gained 8 sen to RM5.26, Maybank improved 5 sen to RM8.79, Sime Darby Plantation accumulated 7 sen to RM4.40, Petronas Chemicals was 6 sen better at RM8.41, and IHH improved 4 sen to RM5.96.
As for the actives, CTOS Digital lost 4 sen to RM1.50, Hong Seng and Pasukhas added half-a-sen each to 20.5 sen and 2.5 sen, respectively, and Vestland improved 1 sen to 40 sen while Minda Global was flat at 7 sen.
On the index board, the FBM Emas Index earned 46.03 points to 10,862.30, the FBMT 100 Index advanced 42.09 points to 10,527.55, and the FBM Emas Shariah Index went up 65.18 points to 11,141.38.
The FBM 70 Index widened 55.91 points to 13,741.91 while the FBM ACE Index added 47.20 points to 5,758.66.
Sector-wise, the industrial products and services index advanced 1.08 points to 191.01, the plantation index increased 51.82 points to 6,881.20 and the financial services index grew 19.211 points to 16,432.65, while the energy index fell 1.54 points to 885.71. – Bernama, February 2, 2023
