Bursa opens marginally higher but retreats thereafter

KUALA LUMPUR – Bursa Malaysia opened marginally higher but retreated thereafter, taking its cue from the weaker global markets after the United States Federal Open Market Committee (FOMC) reiterated its hawkish stance in its latest meeting minutes.

At 9.05am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was 2.32 points lower at 1,602.40 from yesterday’s close of 1,604.72.

The barometer index opened 0.79 of-a-point better at 1,605.51.

On the broader market, losers led gainers 226 to 120, while 230 counters were unchanged, 1,660 untraded and 16 others suspended.

Total turnover stood at 124.98 million worth RM66.11 million. 

Meanwhile, the ringgit continued to open lower against the US dollar as the greenback strengthened following the release of the US FOMC meeting minutes, said an analyst. 

At the opening, the local currency declined to 4.2145/2180 versus the greenback from 4.2130/2155 at Wednesday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that major equities benchmarks had been spooked by the FOMC meeting minutes.

“There have been explicit discussions on how the US Federal Reserve would reduce the size of its balance sheet,” he said.

Afzanizam said according to the minutes, the options available are likely to be more aggressive than the 2017-2019 experience. 

The Fed has cut the size of its balance sheet from US$4.45 trillion in the beginning of 2017 to US$4.17 trillion – a less than US$1 billion reduction, he added. 

“The Fed alluded that the tightness in the labour market and elevated inflation warrant the commencement of the balance sheet run-off.

“This would be the focus in today’s trade. Meanwhile, the US Dollar Index has already gone up by 0.13% to 99.59 points,” he said.

As such, he expects the ringgit to trade in the RM4.21-RM4.22 range today. 

At the opening, the ringgit was traded mostly lower against a basket of major currencies, except against the British pound where it rose to 5.5109/5155 from 5.5178/5210 at Wednesday’s close.

The local unit had eased versus the Singapore dollar to 3.1007/1035 from 3.1001/1021, slipped against the Japanese yen to 3.4095/4126 from 3.4014/4034, and declined against the euro to 4.5989/6027 from 4.5964/5991 yesterday. – Bernama, April 7, 2022