Bursa Malaysia Experiences Decline Amid Caution and Geopolitical Tensions
Bursa Malaysia’s benchmark index fell due to selling in construction and banking sectors, with some support from healthcare stocks. The FBM KLCI dropped 0.66% to 1,517.66. Market sentiment was influenced by rising geopolitical tensions and upcoming economic meetings. Analysts foresee a cautious trading range between 1,500 and 1,530 as investors monitor developments closely.
Bursa Malaysia concluded the trading session with a notable decline in the benchmark index, attributed primarily to sell-offs in the construction and banking sectors. Conversely, equities in the healthcare sector registered some buying activity. Analyst Thong Pak Leng from Rakuten Trade Sdn Bhd emphasized that the FTSE Bursa Malaysia KLCI (FBM KLCI) ended lower due to insufficient buying catalysts.
As of 5 PM, the FBM KLCI had decreased by 10.15 points, reflecting a 0.66 percent decline, settling at 1,517.66 from its prior close of 1,527.81. The index opened at 1,513.29, demonstrating fluctuations between 1,512.21 and 1,523.39 during the trading day. In the broader market, decliners outpaced gainers with 449 stocks losing value compared to 428 that gained.
The overall market turnover diminished to 2.92 billion units, valued at RM2.73 billion, a drop from 3.28 billion units worth RM2.40 billion recorded the previous day. The trading halt on the previous day was due to the Nuzul Al-Quran public holiday. Furthermore, Thong noted that investors remain vigilant regarding potential tariff escalations as geopolitical tensions rise, particularly between the US and nations involved in the ongoing Ukraine conflict.
Domestically, the FBM KLCI struggled to sustain the 1,520 level, with predictions suggesting the next significant support would be around 1,500. Thong stated, “As the market pulls back, many fundamentally strong stocks are trading at discounted prices, encouraging bargain hunting by value investors, and we anticipate the FBM KLCI to trend between 1,500 and 1,530 for the remainder of the week.”
Mohd Sedek Jantan, head of investment research at UOB Kay Hian Wealth Advisors Sdn Bhd, attributed the decline in Wall Street to cautious investor sentiment ahead of the Federal Open Market Committee (FOMC) meeting. However, he remarked that market sentiment had begun stabilizing, evidenced by gains in commodities and utilities stocks during the session.
While the FOMC is likely to maintain current interest rates, market attention will focus on the dot plot, which outlines future policy directions. It is also noteworthy that the Bank of Japan elected to keep its benchmark interest rate unchanged at 0.50 percent, aligning with expectations. In summary, broader market fluctuation reflects caution surrounding fiscal strategies, particularly following a nearly 30 percent drop in Indonesian government revenues.
Regarding market performance, Maybank saw a decline of six sen, settling at RM10.36, while CIMB fell 32 sen to RM6.93. Public Bank and Tenaga remained stable at RM4.54 and RM13.56, respectively, whereas IHH Healthcare gained a slight increment of one sen, closing at RM7.10. Active stocks included Pertama Digital, gaining six sen to 17 sen, but IJM Corporation experienced a significant loss, dropping 19 sen to RM1.93.
The FBM Emas Index decreased by 60.42 points to 11,364.06, while other indices such as the FBMT 100 and FBM 70 showed declines also. The sectoral performance varied, with the Financial Services Index losing 183.70 points to 18,612.44 but the Plantation Index demonstrating growth of 21.12 points, reaching 7,437.37. The trading environment overall reflected volatility amid investor uncertainty and international developments.
In conclusion, Bursa Malaysia’s recent trading session exhibited a decline in its benchmark index, attributed to lack of buying catalysts and significant sell-offs in certain sectors. With careful observation of geopolitical tensions and economic forecasts, analysts anticipate a cautious market trend with potential for value opportunities in fundamentally strong stocks. This situation underscores the need for investors to remain vigilant about market movements, particularly in light of forthcoming economic events.
Original Source: www.thestar.com.my
