KUALA LUMPUR: Volatility is taking root on Bursa Malaysia on Friday ahead of a US jobs report, even as the steep decline on Wall Street overnight paved the way for selling in equities.
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The FBM KLCI opened 2.17 points lower at 1,551.07 with Press Metal leading the decline after a strong rally in the previous session.
The aluminium producer fell seven sen to RM5.50 after having gained over 7% in the previous day’s trading amid rising commodity prices.
Energy major Tenaga Nasional dropped six sen to RM11.44
Bank shares also weighed, including CIMB down four sen to RM6.61, Public Bank sliding two sen to RM4.19 and Ambank falling two sen to RM4.20.
Of actives, Tanco was flat at 86.5 sen, Ingenieu rose 0.5 sen to 14.5 sen and Minetec gained 0.5 sen to 16 sen.
The major US indices ended with more than 1% loss each as investors priced in further delays in the Fed’s interest rate. Observers are anticipating prolonged high inflation levels as oil prices jump amid growing tensions in the Middle East.
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A further escalation of the Middle East conflict this week is giving investors pause with Israel on high alert for a possible attack by Iran after the Islamic Republic accused Israel of bombing its embassy complex in Syria on Monday.
Bursa Malaysia will not be immune to the effects of the geopolitical turmoil, which has driven the price of Brent crude above US$91 a barrel.
“While the FBM KLCI managed to recover all its previous session losses yesterday, volatility is expected to remain on the fore in view of the negative developments in the Middle East,” said Apex Securities Research in a note.
Malacca Securities Research, meanwhile, said sentiment may turn weaker on the local front, especially on technology stocks. However, it said commodity-related sectors such as oil and gas, plantations and the gold-related sectors will gain on firm underlying commodity prices.
“Also, we noticed aluminium and steel stocks are gaining momentum in tandem with the recent bullish tone in the construction and property sectors,” it said in a note.
-TheStar