KUALA LUMPUR: Investors were slow to digest the news of the Federal Reserve's overnight rate cut following Wall Street's mixed reaction.
The FBM KLCI rose 2.68 points to 1,663.27, a tentative increase given that US stocks had erased gains from earlier in the session to end in the red.
While markets had been hoping for a 50 basis points reduction, a segment of investors were left wondering if the sharp cut signalled the central bank was acting out of concern for a slowing economy.
"We believe this could raise concerns about a potential recession, or at the very least, suggest that the Fed anticipates weaker economic data ahead, prompting such a large rate cut," said Malacca Securities Research in its review.
However, US futures, especially the tech-centric Nasdaq mini, are pointing towards a stronger performance in the coming session as investors factor the lower lending rate into corporate earnings.
Back home, Malacca Securities said the market is expected to focus on REITs following the rate cut.
"The stronger ringgit could also benefit domestic sectors like consumer, utilities, financial, and automotive.
"Additionally, we are optimistic about the construction and property sectors, supported by ongoing data center projects and the emerging catalyst from the Johor-Singapore Special Economic Zone," it said.
Stocks with buying momentum on Thursday included AirAsia X
rising six sne to RM1.56 and Capital A jumping five sen to 83 sen.
It was announced yesterday that Capital A had received the go-ahead for its EGM circular for the proposed disposal of its aviation business to AirAsia X.
Meanwhile, Solar District Cooling surged 12 sen to 50 sen after making its debut on the ACE Market, topping the actives list with 67.9 million shares as at 9.22am.
