Bursa Malaysia Experiences Decline Amidst Selling Pressures and External Factors

Bursa Malaysia’s benchmark index fell significantly due to selling in construction and banking sectors, closing down 0.66 percent. Investor sentiment was affected by geopolitical tensions and mixed regional indices. Heavyweights such as Maybank and CIMB experienced declines, while some healthcare stocks saw minor gains. Market dynamics are anticipated to be influenced by upcoming economic indicators and external factors.

Bursa Malaysia’s benchmark index concluded the trading session on a downward trend, primarily due to selling pressures in the construction and banking sectors. Notably, healthcare stocks exhibited some buying interest, as analyzed by Thong Pak Leng, Vice-President of Equity Research at Rakuten Trade Sdn Bhd. He remarked that the FTSE Bursa Malaysia KLCI (FBM KLCI) declined because of insufficient buying catalysts.

By 5 PM, the FBM KLCI decreased by 10.15 points, or 0.66 percent, settling at 1,517.66, compared to the previous close of 1,527.81. The index opened at 1,513.29, experiencing fluctuations between 1,512.21 and 1,523.39 throughout the session. Furthermore, the broader market registered 449 losers against 428 gainers, with 1,078 untraded and seven suspended stocks noted.

Turnover saw a decline to 2.92 billion units valued at RM2.73 billion, a drop from the previous day’s 3.28 billion units worth RM2.40 billion. The exchange was closed for the Nuzul Al-Quran public holiday the day prior. Meanwhile, Thong highlighted concerns regarding potential tariff escalations as former President Donald Trump reiterated reciprocal trade threats, coinciding with ongoing discussions for a US-mediated peace agreement between Russia and Ukraine.

In the local market, the benchmark index struggled to maintain the 1,520 level, with projections indicating the next support level at 1,500. Thong stated, “As the market pulls back, many fundamentally strong stocks are trading at discounted prices, encouraging bargain hunting by value investors,” projecting that the FBM KLCI would trend between 1,500 and 1,530 for the week’s duration.

Mohd Sedek Jantan, Head of Investment Research at UOB Kay Hian Wealth Advisors Sdn Bhd, noted that Wall Street’s declines were chiefly attributed to investor caution ahead of the Federal Open Market Committee (FOMC) meeting, amid stabilizing market sentiment. He commented, “However, compared to last week, market sentiment has shown signs of stabilization, with fears gradually easing.”

Market dynamics were further impacted by a decline in Indonesian equities and the rupiah, marking a two-week low against the US dollar, attributed to a significant drop in government revenues there. Additionally, the Bank of Japan maintained its benchmark interest rate at 0.50 percent, consistent with estimates by economists.

In the heavyweights, Maybank fell to RM10.36, down by six sen, while CIMB experienced a decline to RM6.93, dropping by 32 sen. Public Bank and Tenaga remained unchanged at RM4.54 and RM13.56, respectively, whereas IHH Healthcare rose by one sen to RM7.10. Among the actively traded stocks, Sapura Energy was flat at 4.5 sen, while Pertama Digital gained six sen, and Sedania increased by 3.5 sen.

In contrast, IJM Corporation saw a loss of 19 sen, finishing at RM1.93. On the index board, the FBM Emas Index lost 60.42 points, and the FBMT 100 Index decreased by 66.10 points. The FBM Emas Shariah Index, FBM 70 Index, and sector performances displayed mixed results, reflecting varied investor sentiment during the session.

In summary, Bursa Malaysia concluded the trading day lower due to selling pressures in several sectors, particularly construction and banking. The absence of buying catalysts, coupled with external factors such as geopolitical tensions and concerns over tariff escalations, affected investor sentiment. Although the overall market displayed weakness, some sectors, such as healthcare, showed signs of resilience, while fundamentally strong stocks appeared poised for value investing. Going forward, market movements will remain influenced by key economic events and regional market dynamics.

Original Source: www.thestar.com.my