Stocks in Malaysia on the verge of reversing Friday's positive progress
The Kuala Lumpur Composite Index (KLCI) finished sharply higher on Friday, moving just beneath the 1,535-point plateau. This positive trend in the Malaysian stock market follows a three-day losing streak, as Asian equity markets have shown resilience despite the new U.S. tariffs and a weak American jobs report.
Asian markets opened positively due to the recent extension of the U.S.-China trade truce, which delayed the increase of tariffs. Tokyo's Nikkei 225 rose 2.15%, Shanghai's Composite Index increased by 0.5%, and Hong Kong's Hang Seng Index went up by 0.25%. This optimistic start suggests that investors in Asia appreciated the temporary easing of trade tensions.
However, the tariffs, when implemented in 2025, have raised consumer prices in the U.S. significantly, with an average effective tariff rate of 18.6%, the highest since the 1930s. This could potentially pressure Asian exporters long term. Yet, the market reaction in Asia seems contained for now, as investors remain cautious and focused on broader uncertainties, including upcoming U.S. economic data and geopolitical events.
The weak American jobs report has added to concerns about potential U.S. economic slowdown and Fed policy shifts. However, direct spillover effects to Asian equity markets have been limited so far. Investors continue to adopt a "wait-and-see" mode amid ongoing trade negotiations and global macroeconomic uncertainty.
Meanwhile, the sell-off on Wall Street was caused by the new tariffs announced by the White House. The NASDAQ tanked 472.27 points or 2.24 percent to close at 20,650.13, while the S&P 500 dropped 101.38 points or 1.60 percent to end at 6,238.01. The Dow tumbled 542.42 points or 1.23 percent to finish at 43,588.58.
Crude oil prices fell on demand concerns for potentially reduced consumption amid new tariffs from the U.S. government. West Texas Intermediate crude for September delivery was down $1.92 or 2.77% at $67.34 per barrel.
In the Malaysian stock market, AMMB Holdings spiked 2.77 percent, while Axiata slid 0.37 percent, Celcomdigi sank 0.78 percent, CIMB Group soared 3.66 percent, Gamuda surged 4.25 percent, IHH Healthcare added 0.45 percent, IOI Corporation shed 0.53 percent, Kuala Lumpur Kepong dropped 0.82 percent, Maxis gained 0.29 percent, Maybank rallied 2.24 percent, MISC climbed 1.88 percent, MRDIY tanked 1.82 percent, Nestle Malaysia dipped 0.32 percent, Petronas Chemicals stumbled 2.06 percent, Petronas Dagangan rose 0.19 percent, Petronas Gas slumped 0.56 percent, PPB Group retreated 1.59 percent, Press Metal eased 0.19 percent, Public Bank strengthened 1.90 percent, QL Resources declined 0.94 percent, RHB Bank collected 0.98 percent, SD Guthrie lost 0.42 percent, Sunway accelerated 2.54 percent, Tenaga Nasional jumped 2.15 percent, YTL Corporation fell 0.40 percent and YTL Power, 99 Speed Mart Retail, Sime Darby and Telekom Malaysia were unchanged.
The global forecast for the Asian markets is broadly negative due to the new U.S. tariffs and a weak American jobs report. For the week, the Dow plummeted 2.9 percent, while the S&P sank 2.4 percent and the NASDAQ was down 2.2 percent. However, the market reaction in Asia has been more subdued, indicating a cautious optimism amid ongoing developments.
Investors in Asia are staying cautiously optimistic, with some Asian markets opening positively due to the extension of the U.S.-China trade truce. However, the looming tariffs in 2025 could potentially impact Asian exporters negatively in the long term, causing concern within the finance and business sectors.
Despite the weak American jobs report and potential U.S. economic slowdown, the impact on Asian equity markets has been limited so far, prompting investors to adopt a wait-and-see approach amid ongoing trade negotiations and global macroeconomic uncertainty.
