KUALA LUMPUR: Bursa Malaysia closed lower today amid a global rout in the bonds, triggered by fears that interest rates will stay higher for longer, says analysts.
At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) dwindled 4.17 points to 1,415.84 from Tuesday's closing of 1,420.01.
The index, which opened 2.10 points weaker at 1,417.91, fluctuated between 1,412.70 and 1,419.66 throughout the session.
SPI Asset Management managing director Stephen Innes said it i's a sea of red in Asia as US Treasuries extended losses during the session.
"Unless there is a turn lower in US economic data, particularly a weaker-than-expected nonfarm payrolls this Friday, there is little in the way to prevent US yields from marching higher and further denting global and Malaysian stock market sentiment," he told Business Times, adding that it is a difficult and tricky market to navigate.
Back home, Tradeview Capital fund manager Neoh Jia Man said the FBM KLCI closed in negative territory, with all sectors except for Industrial products and services experiencing declines.
On the broader market, decliners led gainers 730 to 255, while 395 counters were unchanged, 914 untraded and 24 others suspended. Turnover decreased to 3.02 billion units worth RM2.23 billion from 3.22 billion units worth RM2.20 billion on Tuesday
"Market sentiment remained influenced by the increase in U.S. treasury yields and the anticipation of additional rate hikes by the U.S. Fed.
"However, we see a supportive tailwind for the local market, with investors potentially taking advantage of the dip to position in selected names for the upcoming Budget 2024," said Jia Man.
Rakuten Trade Sdn Bhd equity research vice president Thong Pak Leng said currencies across the region saw devaluation, with the majority hitting multi-month lows against a strengthening US dollar, which reached new high points.
"We foresee that near-term market sentiment may stay turbulent, given the uncertainties surrounding regional and global performance.
"Nevertheless, we hold the view that bargain hunting could prevail as the benchmark index remains in an oversold position.
"Pressure on local and regional stocks is expected to persist as interest rates and bond yields climb. As such, we anticipate the FBM KLCI to trend within the range of 1,410-1,425 with immediate support at 1,415 while resistance at 1,430," he added.