KUALA LUMPUR: Bursa Malaysia ended trading in the red, against a mixed bag of results in other regional stock markets, as investors waited for the release of critical economic data from the US.
At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) dropped 13.21 points to close at 1,545.59 from yesterday's close of 1,558.80.
The benchmark index opened 2.50 points eased at 1,556.30 and hit an intraday high of 1,556.69 earlier in the day. On the broader market, losers led gainers 780 to 311, while 404 counters were unchanged, 814 untraded and 77 others suspended.
Tradeview Capital fund manager Neoh Jia Man said aside from the external headwinds from weak market sentiment, disappointing results from several index heavyweights also dragged down the KLCI.
"We believe that aside from the ongoing earnings release, the direction of the domestic market over the next few days will also be dictated by the upcoming release of several key U.S. economic data," he told Business Times.
SPI Asset Management managing director Stephen Innes said investors remain grounded ahead of critical economic data, including the Federal Reserve's (Fed) preferred inflation gauge, which is expected to shed some light on the timing of the first Fed cut.
Despite some positive news flows of late, the local markets are paring risk on a combination of hawkish Fed speak and higher US yields, he said.
Global and local investors are fretting ahead of the US personal consumption expenditures (PCE) deflator, which is likely to confirm the hotter prints on both US producer price index and consumer price index prints.
Innes said the problem is that PCE is the Federal Reserve's preferred inflation gauge, so a higher than expected print could further push back on 2024 interest rate cuts. Investors worldwide, as well as those locally, are worried about the upcoming US PCE, deflator report.
It is expected to confirm the high numbers seen in both US producer price index and consumer price index reports.
"The prospect of the Fed cutting interest rates has been one of the principal tenants supporting Asia markets.
"The dollar is staying strong across the board despite weaker US durable goods data overnight, which hints that traders are worried that US rate cuts could get pushed out further," he told Business Times.
Rakuten Trade Sdn Bhd equity research vice president Thong Pak Leng said the lower performance of the FBM KLCI was due to profit taking activities following yesterday's strong gain.
"We view the profit takings as a healthy correction as it allows the market to digest recent rally and provide a stronger base for a more sustainable uptrend. "We anticipate the FBM KLCI to trend within the range of 1,540-1,570 for the rest of the week," he added.