Bursa Malaysia downtrend likely to continue next week
KUALA LUMPUR: Bursa Malaysia is expected to continue its downtrend next week on gloomy investor sentiment as fears of a trade war was triggered by US President Donald Trump's plan to impose steep tariffs on steel and aluminum imports.
Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said Trump's Thursday decision of instituting tariffs of 25% on steel imports and 10% on inbound aluminium shipments had worsened the already cloudy sentiment in the market.
"Therefore, investors believe the move would have a spillover effect on emerging markets like Malaysia and turn away from the equity market.
"Trump's announcement had sparked trade war worries that might involve countries like China, as well as European countries, and they are the major export destinations for Malaysia," he told Bernama.
Nazri Khan expects the wary sentiment would extend until next week, causing the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to lower at around 1,850 points from Friday's close of 1,856.07.
For the week just-ended, Bursa Malaysia was traded mostly mixed to lower, despite touching a three-week high of 1,871.46 on Tuesday due to the encouraging corporate earning results.
Moving in tandem with its regional peers, the local bourse was mostly affected by the new US Federal Reserve Chair's hawkish remarks on the US monetary policy as fears emerged over the faster pace of interest rate hike.
China's sluggish manufacturing data in February and Trump's tariff hike remarks also played a vital role in influencing the market barometer movement.
On a Friday-to-Friday basis, the FBM KLCI finished 5.43 points easier at 1,856.07.
The FBM Emas Index lost 139.83 points to 13,173.95, the FBMT100 Index depreciated 112.65 points to 12,892.74 and the FBM Emas Syariah Index dropped 229.04 points to 13,372.35.
The FBM 70 dipped 394.07 points to 15,978.48 and the FBM Ace slumped 295.31 points to 6,154.67.
On a sectoral basis, the Industrial Index decreased 36.68 points to 3,215.45, while the Plantation Index gained 18.50 points to 8,079.99 and the Finance Index surged 226.29 points to 18,228.07.
Weekly turnover went up to 14.37 billion units worth RM14.20 billion from 12.80 billion units worth RM11.26 billion.
Main market volume rose to 9.22 billion shares valued at RM13.30 billion from 7.81 billion shares valued at RM10.31 billion.
Warrant turnover fell to 2.44 billion units worth RM439.50 million versus 2.96 billion units worth RM526.96 million last week.
The ACE market advanced to 2.67 billion shares valued at RM441.25 million against 2.0 billion shares worth RM403.30 million.
Gold futures contracts on Bursa Malaysia Derivatives are likely to remain uncertain next week, tracking the US Commodity Exchange's (COMEX) gold market, said a dealer.
Phillip Futures Sdn Bhd Dealer Tee Guy Eon said gold prices were expected to continue to be pressured by the expectation of the US Federal Reserve interest rate hike anytime soon.
"The precious metal is vulnerable towards interest rates, as it could increase the opportunity cost of holding non-interest-bearing gold," he told Bernama.
For the week just ended, the overall local gold price traded slightly higher, lifted by positive sentiment following the uptrend on the COMEX gold futures as the US dollar eased on worries over US President Donald Trump's plan to impose heavy tariffs on imported steel and aluminium.
On a Friday-to-Friday basis, March 2018 and April 2018 decreased 33 ticks each to RM166.20 a gramme and RM166.95 a gramme, respectively, while May 2018 eased eight ticks to RM167.70 a gramme and June 2018 declined 17 ticks to RM167.70 a gramme.
Weekly turnover rose to 20 lots worth RM334,400 from last week's 14 lots worth RM236,260, while open interest fell to 70 contracts from 73 contracts. — Bernama