KUALA LUMPUR (Nov 3): Bursa Malaysia opened lower with most indices in the negative zone due to weaker buying sentiment, as Wall Street tumbled after the US Federal Reserve (Fed) hiked rates by 75 basis points and hinted at more smaller increases to follow as it continues to fight inflation.
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At 9.06am on Thursday (Nov 3), the benchmark FBM KLCI index had fallen 4.96 points to 1,446.65, from Wednesday’s close at 1,451.61.
The market bellwether opened 3.29 points lower at 1,448.32.
On the broader market, losers led gainers 209 to 77, while 215 counters were unchanged, 1,824 untraded, and nine others suspended.
Turnover stood at 177.37 million units worth RM47.95 million.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the Dow Jones Industrial Average lost 505 points, whereas the Nasdaq declined by 366 points, while the US 10-year yield inched higher to almost the 4.1% level.
On the local bourse, the KLCI rebounded above the 1,450 mark at Wednesday’s close, supported by buying of plantation and telecommunications related counters.
Nonetheless, he anticipated some headwinds in the local market, as investors would have their eyes on Bank Negara Malaysia’s (BNM) move on interest rates later on Thursday.
“Therefore, we expect the index to hover in the 1,440-1,460 range as sentiment is seen as cautious.
“While many expect BNM to impose a 25-basis-point (bps) increase, we reckon technology stocks to be high on the selling list, as regional markets may be dragged into negative territory,” he told Bernama.
MIDF Research in a note said that after the US Federal Open Market Committee (FOMC) meeting on Wednesday, the Fed announced another large 75 bps hike, pushing the federal funds rate higher to 3.75% to 4%.
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This marks the fourth back-to-back 75 bps increase since June, as widely anticipated by the market consensus, as inflation remained elevated and above the Fed’s 2% longer-term target on the back of a still strong labour market.
“The FOMC also reiterated its commitment towards the balance sheet reduction plan as issued in May. As of last week, the Fed’s balance sheet had dropped to US$8.72 trillion (RM41.36 trillion), a cumulative reduction of US$242.4 billion from the highest level in mid-April,” it said.
Among Bursa heavyweights, Malayan Banking Bhd (Maybank) stood at RM8.54, followed by Digi.Com Bhd at RM3.81, and IOI Corp Bhd at RM3.99. All three counters were flat.
Public Bank Bhd fell two sen to RM4.43, while Maxis Bhd too declined by two sen to RM3.84. CIMB Group Holdings Bhd rose one sen to RM5.50.
Among the actives, Ta Win Holdings Bhd stood at 8.5 sen, followed by Dolphin International Bhd at 2.5 sen, and Bina Puri Holdings Bhd too at 2.5 sen. The three stocks were half a sen lower. Advance Synergy Bhd was flat at seven sen, and so was Citaglobal Bhd at 27.5 sen.
On the index board, the FBM Emas Index slipped 34.64 points to 10,262.80, the FBM 70 slid 41.63 points to 12,159.22, and the FBMT 100 Index lost 34.29 points to 9,996.56.
The FBM Emas Shariah Index lost 47.07 points to 10,320.60, while the FBM ACE declined by 40.06 points to 4,913.78.
Sector-wise, the Financial Services Index eased 1.39 points to 16,324.70, the Industrial Products and Services Index edged down 0.87 of a point to 173.95, and the Plantation Index slipped 50.44 points to 6,786.25.
The Energy Index was 0.34 of a point firmer at 710.67.-BERNAMA