Malaysian shares fell on Wednesday as investors returned from holiday cautiously following overnight losses on Wall Street and sharp declines in regional markets.
FBM KLCI fell 15.6 points (1%) to 1,512.21 after three straight days of losses. The index paused in midday trading to hit a daily low of 1,517.96 as higher-priced banking stocks pared their losses.
Khoo Zing Sheng, fund manager at Pheim Asset Management, sees CIMB Niaga contributing around 25% to CIMB Group’s revenue, with weakness in Indonesia likely to weigh on sentiment.
Overall, investors are expected to remain cautious, keeping the KLCI in line in the near term given the lack of catalyst in the local market and continued weak sentiment in the US.
Disturbed by uncertain US trade policy, investors have been weighing the potential economic damage to the US and its major trading partners from the tariff war.
The situation has also raised concerns that the world's largest economy could slip into recession, weighing on markets.
Investors are now awaiting the US Federal Reserve's monetary policy decision early Thursday morning. On Tuesday, when Malaysia's market was closed, Indonesia's benchmark index fell 7% to its lowest level since September 2021.
Rakuten Trade Sdn Bhd's head of research, Kenny Yee, said the KLCI would recover. According to him, the current situation is more of a hasty reaction due to foreign selling in the Asean region to participate in Hong Kong.
