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KUALA LUMPUR – The ringgit opened marginally lower this morning as investors weighed the impact of the United States’ lower inflation data on the market, which could potentially lead to a devaluation of the US currency in the short term.
At 9.03am, the local note was traded at 4.3955/4050 against the US dollar, compared with 4.3900/3955 at the close yesterday.
ActivTrades Trader Dyogenes Rodrigues Diniz said although the inflation data was lower than expected, the interest rate decision – which could be an increase to 4.5% from 4.0% presently – was in line with expectations and the US Federal Reserve’s statement points to a scenario of tight monetary policy well into 2023.
“Based on this, it is possible that the ringgit will register an upward correction over the next few days.
“The interest rate is the most important element in determining the price of money that circulates in an economy because it determines how much the government will remunerate public debt securities,” he said in a note today.
Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.
The local note weakened against the British pound to 5.4575/4692 from 5.4440/4509 at yesterday’s close and eased versus the euro to 4.6909/7010 from 4.6819/6878 yesterday.
However, it improved against the Japanese yen to 3.2456/2531 from 3.2552/2608 at the close yesterday and inched up versus the Singapore dollar to 3.2610/2688 from 3.2627/2675 previously.
Bursa Malaysia also retreated to open lower today as cautious sentiments persisted after the Fed announced a hawkish move regarding the interest rate, an analyst said.
At 9.10am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) declined by 0.46% or 6.81 points to 1,476.36 from yesterday’s closing of 1,483.17.
The market bellwether opened 1.39 points lower at 1,481.78.
On the broader market, decliners edged past gainers 153 versus 143, while 223 counters were unchanged, 1,754 untraded, and 41 others suspended.
Turnover stood at 137.53 million units worth RM57.63 million.
Rakuten Trade Sdn Bhd vice-president of Equity Research, Thong Pak Leng said Wall Street closed in the negative territory as traders absorbed the Fed’s statement that there will be more rate hikes ahead to fight inflation.
On the home front, he said the sentiment in the local bourse may turn cautious as investors await further guidance following Wall Street’s weakness.
“However, stock accumulation is expected to continue, hence we anticipate the FBM KLCI index to trend between 1,475 and 1,490, with oil and gas stocks remaining in the limelight,” he said.
Among the heavyweights, financial stocks Maybank, Public Bank and CIMB were all down by four sen to RM8.73, RM4.40, and RM5.79, respectively, Petronas Chemicals fell by three sen to RM8.47, and TNB trimmed seven sen to RM9.27.
Of the actives, NWP added half-a-sen to 21 sen, Nylex gained five sen to 26.5 sen and Lay Hong inched up one sen to 28 sen, while Jade Marvel lost one sen to 35 sen and Iris dropped half-a-sen to 13.5 sen.
On the index board, the FBM Emas Index contracted 37.21 points to 10,615.50, the FBMT 100 Index shed 39.90 points to 10,316.72, the FBM Emas Shariah Index was 34.59 points weaker at 10,748.32, the FBM 70 Index slipped 19.40 points to 13,011.13, and the FBM ACE Index eased 18.56 points to 5,492.43.
Sector-wise, the Financial Services Index was 52.52 points lower at 16,617.05, the Plantation Index lost 14.59 points to 6,726.30 and the Industrial Products and Services Index decreased by 0.12 of-a-point to 181.26, while the Energy Index added 3.37 points to 798.73. – Bernama, December 15, 2022