Bursa Malaysia falls in tandem with US sell-off

KUALA LUMPUR: Bursa Malaysia pulled back following a sharp sell-off on Wall Street overnight amid diminishing hopes of a cut to the US lending rate in June.

After three consecutive sessions of gains, the benchmark FBM KLCI dipped 0.7 points to 1,547.29.

The biggest fall was seen in PETRONAS Dagangan, shedding 36 sen to RM21.92 while YTL Power slipped four sen to RM3.93 and MISC dropped four sen to RM7.89.

Top actives on the market were Zentech down one sen to 2.5 sen, NCT up two sen to 53 sen and AppAsia rising 0.5 sen to 11.5 sen.

"With choppiness taking shape across global equities, we reckon the negative developments may permeate to stocks across Bursa Malaysia today," said Apex Securities Research in its review.

It projected a pullback among the domestic blue chips while suggesting the rally in lower liners would also take pause after hitting overbought levels.

"We remain upbeat on the oil and gas sector, riding on the rising crude oil prices ahead of the Opec+ meeting today.

"Also, the plantation sector may be in the spotlight as CPO prices rallied to the highest level since February 2023," it said.

US markets had their worst day in nearly a month, leading to a 1% or 400-point drop in the Dow Jones to 39,170, and a 0.7% decline in the S&P500 to 5,205. The Nasdaq Composite shed 0.95% to 16,240.

Recent inflation data, combined with remarks from policymakers have suggested the US central bank may consider holding the interest rate steady at its June meeting.

At the time of writing, the CME FedWatch Tool has a 61.7% probability of the Federal Reserve cutting borrowing costs by 25 basis points, and 36.4% chance of no change. The forecaster projects only 1.8% probability of the central bank cutting the interest rate by 50 basis points.

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