KUALA LUMPUR – Bursa Malaysia opened the morning session in the red today, tracking the decline on overnight Wall Street performance, said an analyst.
At 9.05am, the FTSE Bursa Malaysia KLCI (FBM KLCI) shed 8.83 points or 0.57% to 1,546.08 from yesterday’s close of 1,554.91.
The benchmark index opened 4.67 points easier at 1,550.24.
On the broader market, decliners outnumbered advancers 437 to 49, while 146 counters were unchanged, 1,637 untraded and 22 others suspended.
Turnover stood at 286.43 million units worth RM121.62 billion.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said Wall Street was trashed by bears as fears of inflationary pressures ballooned.
The Dow Jones Industrial Average lost 1,164 points whilst the tech-heavy Nasdaq Composite declined by 566 points despite the United States’ 10-year yield easing slightly to below the 2.9% level.
“On the home front, the FBM KLCI market undertone remains cautious.
“Nonetheless, reflecting the bloodbath on US equities overnight, we believe regional markets would see major headwinds today,” Thong said.
As such, he said the index is reckoned to possibly trend lower and hover within the 1,540-1,555 range today.
“Meanwhile, the Malaysian Government Securities (MGS) 10-year yield has risen to a multi-year high of above 4.5%, indicating some selling activities.
“On the other hand, crude oil prices eased marginally with the benchmark Brent crude oil closing below US$110 (RM484) per barrel amid the confusion on demand and supply situation,” he said.
Among heavyweights, Maybank was flat at RM8.99, while Public Bank fell 5 sen to RM4.56, IHH Healthcare eased 3 sen to RM6.43.
Petronas Chemicals bagged 2 sen to RM10 and CIMB rose 1 sen to RM5.08.
Of the actives, Sapura Energy erased 0.5 sen to 7 sen, Serba Dinamik deducted 2 sen to 14 sen, Dagang Nexchange decreased 3 sen to RM1.02, while Techna-X inched up 0.5 sen to 5.5 sen and Country Heights added 1.5 sen to 85 sen.
Among the top losers, Nestle slipped RM1.50 to RM132.90, Malaysian Pacific Industries declined RM1.24 to RM30.38, Batu Kawan shed 30 sen to RM27.10, Petronas Dagangan decreased 26 sen to RM21.26 and Sarawak Oil fell 21 sen to RM5.84.
On the index board, the FBM ACE dropped 83.98 points to 5,238.39, the FBM Emas Shariah Index erased 116.93 points to 11,425.95, FBM Emas Index slipped 86.08 points to 11,014.53, FBMT 100 Index dwindled 79.06 points to 10,688.65 and FBM 70 narrowed 170.09 points to 13,016.54.
Sector-wise, the Plantation Index decreased 80.42 points to 8,142.34, the Industrial Products and Services Index was 2.14 points lower at 196.84 and the Financial Services Index dropped 54.33 points to 16,612.58.
Meanwhile, the ringgit slid further to open lower at RM4.40 against the US dollar, the lowest since March 2020 following a hawkish stance by the US Federal Reserve (Fed) to tighten its monetary policy.
At 9.19am, the local note stood at 4.4050/4080 versus the greenback from yesterday’s close of 4.3960/3975.
The ringgit hit a record low on March 23, 2020 when it reached RM4.447.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said this is a reflection on heightened economic uncertainties, which in the current context is about the prospect of higher interest rates in the US and an inflation outlook.
“Higher inflation rate is taking a toll on the consumer sector as business costs are rising, affecting their profit margin.
“The Fed is also adamant with their rate hike campaign which could possibly stoke much slower economic activities at some point in the future,” he said.
On Tuesday, Fed chair Jerome Powell said the Fed would keep raising rates until inflation comes down.
Afzanizam said major central banks are also likely to tighten their grip on monetary policy as inflation seems to be pervasive.
“So, the major central banks are really in a tough spot as they need to weigh between rising inflationary pressures and ensuring economic growth remains robust,” he said.
Besides, he said recession also appears to be the buzz word these days, which has resulted in higher demand for risk-free assets such as US Treasury bonds.
In another note, he said the export ban of agro-food-related products by certain jurisdictions is expected to amplify the extent of inflationary pressures.
Hence, foreign exchange players would continue to remain in the safe-haven currency.
The ringgit was, however, traded mostly higher against a basket of major currencies.
It appreciated against the Singapore dollar to 3.1693/1717 from yesterday’s close of 3.1713/1728, increased vis-a-vis the euro to 4.6200/6231 from 4.6268/6284 and strengthened versus the British pound to 5.4406/4443 from 5.4554/4573.
However, the ringgit slid versus the Japanese yen to 3.4269/4295 from 3.4041/4055. – Bernama, May 19, 2022
