KUALA LUMPUR: Malaysia stocks fell more than one per cent on Tuesday after disappointing factory data and most others in the region were subdued on rising US-China trade tensions.
Bursa Malaysia’s benchmark FBM KLCI index lost 20.62 points or 1.28 per cent to close at 1,591.52.
The latest data showed that the country’s manufacturing performance for August fell fractionally to its lowest since March.
The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) recorded 47.4 in August. This was a fractional decline from July’s 47.6, signalling tough demand conditions and rising cost pressures.
IHS Markit chief business economist Chris Williamson said having correctly indicated a strengthening rate of expansion in the second quarter, the survey’s latest data suggest some mild loss of momentum in the third quarter as current manufacturing conditions clearly remained challenging in August.
The PMI, nevertheless, remains consistent with steady annual GDP growth of 4-5 per cent in the third quarter so far.
“The recent subdued Malaysian PMI readings in part reflect ongoing global trade tensions, which have led to a weakening in the pace of economic expansion globally. The worldwide PMI surveys have indicated the slowest worldwide GDP growth for three years in recent months, led by falling manufacturing output,” Williamson said.
Reuters, meanwhile, reported that the United States and China imposed additional tariffs on each other’s goods over the weekend, which rekindled worries of a global recession.
“In terms of trading activity there’s not much, so even if it’s moving up, activity is not much. It’s just a bounce because everyone is very tentative,” it quoted Rachelle Cruz, an analyst at AP Securities, as saying.
Investors were looking ahead to the likelihood of the next round of tariffs expected in October and the outcome of the US Federal Reserve meeting in September, Cruz said.
The Philippine index slipped more than one per cent, pressured by industrials and telecom stocks.
Indonesia’s benchmark was down 28.97 points to 6,261.59, weighed down by utilities and telecom services.
Meanwhile, Singapore’s Straits Times Index inched up, boosted by utilities and industrial stocks.