Bursa Malaysia sinks on escalating China-US trade war

KUALA LUMPUR: Asian share markets including Bursa Malaysia faltered on simmering fears of a trade war between the world’s two largest economies on Wednesday. 

The benchmark FBM KLCI fell as much as 39 points before settling 34.84 points lower, or 1.88% to 1,815.94 at 5pm with most of the damage done in afternoon trading. At the same time, gold and other safe havens trade higher. 

Spot gold rose 0.2% to US$1,334.64 per ounce while U.S. gold futures were up 0.1% at US$1,338.40 an ounce. Spot silver rose 0.3% to US$16.43 per ounce.

The Trump administration announced 25% tariffs on some 1,300 industrial technology, transport and medical products to try to force changes in Beijing’s intellectual property practices.

China said it would levy an additional 25% tariff on imports of 106 U.S. products including soybeans, automobiles, chemicals and aircraft, in response to proposed American duties on its high-tech goods.

Matching the scale of proposed U.S. tariffs announced Tuesday, the Ministry of Commerce in Beijing said the charges will apply to around US$50bil of US imports.

On Bursa Malaysia, the index traded within a range of 40 points between an intra-day high of 1,851.74 and a low of 1,811.56 during the session. There were 111 stocks advancing against 1,105 stocks declining while 227 counters unchanged. About 3.27 billion shares, valued at RM2.78bil, changed hands.

KESM Industries plunged 17.45%, or RM3.06, its biggest move in over 19 years, to RM14.48 at closing. Dutch Lady fell RM1.60 to RM66.20, Petron Malaysia shed RM1.19  to RM7.01 while Hengyuan declined RM1 to RM6.15.

Earlier, Tenaga Nasional Bhd was the top gainer, rising 24 sen to RM15.88 as the company turned ex-dividend today. The counter closed six sen higher to RM15.70.

Among the actively-traded stocks, Sapura Energy eased 3.5 sen to 51 sen with 108.6 million shares traded. PUC fell three sen to 24 sen with 91.3 million shares exchanged hands. 

Elsewhere in the region, Hong Kong stocks tumbled over 2%, with most of the damage done in afternoon trading as Beijing’s swift retaliation against U.S. tariffs.

The Hang Seng index fell 2.2% to 29,518.69, while the China Enterprises Index lost 2.3% to 11,857.41 points.

Hong Kong’s financial markets will be closed on Thursday, April 5, for the Ching Ming Festival. Markets will resume trading on Friday, April 6.

The Nikkei added 0.1% to 21,319.55 after traversing positive and negative territory through the session.

Meanwhile, Reuters reported that losses on European exchanges steepened on Wednesday after China unveiled new tariffs against U.S. products, increasing concerns of an escalating trade standoff between the two countries.

The pan-regional STOXX 600 index and Germany’s exporter-heavy DAX hit a session low, down 1% and 1.4% respectively.

U.S. stocks futures also fell sharply. Nasdaq futures were down 2.1%, S&P 500 futures fell 1.6% and Dow Jones futures tumbled down 1.8%.