Shares and ringgit ease as investors sell ahead of Fed, BoJ decisions

  • Business
  • Wednesday, 27 Apr 2016

As of 9.21am()121GMT), the domestic unit was lower at 3.9380/9460 against the greenback from last Friday's 3.9000/0100.

PETALING JAYA: Shares on Bursa Malaysia fell, erasing gains for the year, as investor sentiment on emerging market turned sour across the region ahead of the central bank meetings in the United States and Japan this week.

The ringgit weakened 0.55% to 3.929 against the US dollar.

“This is like a waiting game... investors are cautious ahead of the key policy decisions of the US Federal Reserve (Fed) and Bank of Japan (BoJ),” a trader told StarBiz.

“Although the market generally expects the Fed to leave the US interest rates unchanged, there are growing concerns that BoJ would launch additional stimulus via quantitative easing to support Japan’s economy that has continued to suffer from deflationary pressure and a stubbornly high yen,” he explained.

The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) decline accelerated after the index slipped below the 1,700-point level for the first time this month.

The benchmark ended down 22.01 points, or 1.28%, to close at 1,692.50 points. Key heavyweights such as Genting Bhd, Public Bank Bhd, Petronas Dagangan Bhd and British American Tobacco (M) Bhd buckled under strong selling pressure.

Market breadth at the local bourse was negative, with 779 counters registering losses, compared with 163 counters that made gains and 287 counters traded unchanged.

Volume was heavy with 2.91 billion shares worth RM2.3bil changing hands.

In the region, Japan’s Nikkei 225 fell 0.7% to 12,615.04, while Singapore’s Straits Times Index was down 0.2% to 2,894.66. China’s A-shares and Hong Kong’s Hang Seng Index bucked the trend, gaining 0.6% to 2,964.7 and 0.5% to 21,407.27.

Selling pressure on Malaysia’s bond market had pushed yields on government debt papers higher yesterday, with returns on the five-year Malaysian government bond (MGS) rising 4.9 basis points to around 3.44%, while the 10-year MGS yields increased 6.2 basis points to 3.84%.

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