KUALA LUMPUR: Bursa Malaysia opened cautiously on Monday as the war in the Middle East progressed over the weekend, exacerbating further the increase in oil prices as the Strait of Hormuz remained closed.
Brent crude is hovering near US$103 a barrel as US President Donald Trump sought to enlist Nato countries to aid in reopening the shipping route through the narrow waterway between Iran and Oman.
"The surge in oil prices has heightened fears on Wall Street of a potential stagflationary environment characterised by rising inflation and slower economic growth, prompting investors to scale back expectations for US Federal Reserve rate cuts, with markets now pricing in only one potential cut in December," said Apex Research in its report.
It added that investor attention will be on the upcoming Federal Open Market Committee (FOMC) meeting scheduled for March 17 and 18 for furthery policy signals.
Back home, with investors on tentherhooks over conflicting developments, Bursa Malaysia remained in selling mode. The FBM KLCI slid 2.44 points to 1,696.41 as trading commenced on Monday.
Financial services remained the most heavily impacted sector as investors fretted over the cost of the war on the economy while also taking the opportunity to cash in on February rally that had taken bank stocks to their highest level on record.
Maybank dropped 10 sen to RM11.22, RHB shed seven sen to RM8.22 and Public Bank fell two sen to RM4.77.
Apex said in its technical reading the FBM KLCI remains above its prevailing uptrend line, which suggests the broader bullish structure remains intact for now.
"As long as the index holds above the 1,685–1,690 support zone, the prevailing uptrend is likely to remain intact. A decisive break below this level would weaken the technical structure and may signal a deeper corrective phase," it added.
