Bursa Malaysia slides amid global market jitters

[MALAYSIA] Bursa Malaysia resumed its downward trajectory following a sharp selloff on Wall Street, sparked by renewed political pressure on the US Federal Reserve from President Donald Trump. His intensified criticism has raised alarms about the potential erosion of the central bank's independence, rattling investor confidence.

The latest bout of global market volatility reflects mounting anxiety over the US economic outlook, with Trump’s attacks on the Fed contributing to rising market unease. Analysts caution that such political interference could disrupt the central bank's policy framework, fueling greater financial market instability in the near term.

At the opening bell, the benchmark FBM KLCI slipped 7.03 points to 1,492.44, extending losses after a subdued session the previous day. The lacklustre trade had earlier signalled a slowdown in foreign outflows from the local bourse.

According to Rakuten Trade, the easing of foreign fund withdrawals is a positive sign, but the persistently low daily trading volumes remain a concern, potentially affecting overall market momentum.

Investor sentiment is also being weighed down by continued weakness in China’s economic recovery, which is dampening regional optimism. As Malaysia’s key trade partner, China’s sluggish demand for raw materials and manufactured products continues to pressure export-oriented counters on Bursa Malaysia.

“In the absence of strong buying triggers, local institutional investors must step in to accumulate at these relatively attractive valuations,” Rakuten Trade said in a note.

TA Securities echoed a cautious outlook, noting that investors are likely to stay on the sidelines amid a lack of clear market catalysts. Market participants are also awaiting upcoming corporate earnings from major US firms, which could provide further direction.

Meanwhile, the ringgit remained under pressure, trading close to multi-month lows against the US dollar. The greenback’s strength, driven by its safe-haven appeal, could further deter foreign interest in Malaysian equities—particularly those with high exposure to imports or US dollar-denominated liabilities.

“Resistance remains capped at 1,527, the 50% Fibonacci retracement level of the rally from the 1,369 low in June 2023 to the 1,684 peak in August 2024,” said TA Securities. “Further resistance is seen at the 61.8% level (1,564) and the 76.4% level (1,610), while immediate support lies at 1,444, followed by the key psychological threshold of 1,400 and the June 2023 low of 1,369.”

Among the leading decliners on Bursa Malaysia were Nestle, which dropped 48 sen to RM80.02, PETRONAS Dagangan down 38 sen to RM19.12, and Heineken retreating 38 sen to RM26.12.

Consumer staples and energy-related stocks bore the brunt of the downturn, reflecting growing concerns about softening domestic demand and volatility in global crude prices. Market analysts anticipate continued sector-specific challenges unless clearer signs of economic recovery emerge.

Actively traded counters included Ingenieur, flat at four sen; Jiankun, unchanged at three sen; and Magma, steady at 37 sen.