KUALA LUMPUR: Bursa Malaysia retreated on Thursday as a hawkish outlook by the Federal Reserve and rising oil prices sent equities prices tumbling.
Brent crude futures surged above the US$110 a barrel mark after Iran reported its South Pars gas field, the world's largest natural gas field, had been hit in an airstrike.
Meanwhile, the Federal Reserve maintained the status quo in its much-anticipated rate decision.
The central bank opted to stay the lending rate at 3.5%-3.75% as widely expected, but investors were disappointed by the hawkish tone struck by Fed chair Jerome Powell, who said the oil shock will put downward pressure on spending and employment.
The FBM KLCI fell 6.52 points to 1,723.29, a mild decline if compared with the early trading performance of other Asian markets. At the time of writing, Japan's Nikkei was down 2.8% to 53,685 while Singapore's Straits Times was down 1.25% to 4,943.
"Global markets are navigating a more complex Fed outlook as policymakers balance softer labour market conditions against persistent inflation risks," said Apex Research in its report.
The research firm noted that firmer oil prices could support energy-related names in Malaysia, even as the broader sentiment remains tied to global developments and rate expectations.
For now, it said market sentiment is expected to stay cautious ahead of the Triple Witching on March 20 and the Hari Raya holiday period, with additional pressure from the weaker overnight performance on Wall Street.
In active trading, Sunway Healthcare extended its rally, gaining seven sen to RM1.92 after it was announced overnight it was to be included in the blue-chip FBM KLCI from March 25.
AirAsia X
dropped six sen to RM1.24.
Oil-related counters reacted positively to the jump in petroleum prices - Hengyuan Refining rose nine sen to RM1.53, Hibiscus Petroleum added eight sen to RM2.20 and Lotte Chemical Titan gained two sen to 43 sen.
