PETALING JAYA: Bursa Malaysia is expected to remain under pressure in the near term as investors weigh the outcome of the US Federal Reserve’s (Fed) interest rate decision, rising crude oil prices amid geopolitical tensions in West Asia, and a broader sell-off in artificial intelligence (AI)-related stocks.
The FBM KLCI fell 18.8 points, or 1.1%, to 1,679.21 points yesterday, with selling pressure broad-based across the local market.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said sentiment was being weighed by growing expectations surrounding the Federal Open Market Committee (FOMC) meeting and concerns over higher crude oil prices.
“Sentiment is being largely influenced by the FOMC meeting, whereby the odds for a 25-basis-point hike has gone up quite significantly,” he told StarBiz.
“Plus, the geopolitics in West Asia and its impact on crude oil prices also raised concern on inflationary pressures, going forward.”
Brent crude was hovering near a four-month high at US$107.39 per barrel yesterday, adding to concerns over inflation and the potential impact on the outlook for interest rates.
Higher oil prices also pushed the US 10-year Treasury yield to 5% for the first time since mid-2007, as investors increased bets on a rate hike at the end of the Fed’s two-day meeting tomorrow.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the local market was tracking weaker regional and global markets, as investors remained cautious amid the uncertain external environment.
He said rising oil prices and renewed concerns over AI development had also weighed on sentiment across markets.
With external uncertainties likely to keep investors defensive, Thong sees the FBM KLCI remaining in consolidation mode in the near term, expecting the benchmark index to trend within the 1,670 to 1,700 range for the rest of the week.
“While selling pressure could persist in the near term, the increasingly stretched technical condition could encourage bargain hunting, particularly in selected blue chips where valuations and dividend yields have become more attractive following the recent decline,” he told Bernama.
Yesterday, the benchmark index opened 3.1 points lower at 1,694.91, its intraday high, before falling to a low of 1,678.06.
Market breadth was subdued, with losers beating gainers 780 to 355.
A total of 551 counters were unchanged, 1,157 untraded and 13 suspended.
Among the top gainers, United Plantations Bhd
gained 50 sen to RM33.60, MISC Bhd added 14 sen to RM7.95, Yinson Holdings Bhd jumped 13 sen to RM2.13, while Panasonic Manufacturing Malaysia Bhd and Gas Malaysia Bhd both firmed 12 sen to RM5.89 and RM5.05, respectively.
As for the top losers, Nestle (M) Bhd weakened RM1.12 to RM90.18, Malaysian Pacific Industries Bhd fell 30 sen to RM39.70, Eurospan Holdings Bhd contracted 25 sen to RM3, Press Metal Aluminium Holdings Bhd declined 24 sen to RM7.52 and Petronas Gas Bhd gave up 20 sen to RM17.20.
Markets came under pressure following a sell-off in technology stocks, after senior US AI executives raised safety concerns and called for a slower pace of AI development.
Stocks in Thailand and the Philip-pines dipped 0.8% and 1.1%, respectively, while the Straits Times Index declined 1.4% and Indonesian stocks fell 1.1%.
