Market Outlook: Local Bourse Set for Volatility Amid Global Economic Pressures

The local stock market is expected to open on a cautious note, following negative cues from the US markets overnight. Inflationary concerns in the US have weighed heavily on investor sentiment, leading to a reduction in optimism for significant interest rate cuts in the near future. Adding to the global uncertainty, escalating tensions in the Middle East, particularly involving Israel’s planned retaliation against Iran, have kept traders on edge. The energy sector could see some buying interest, as oil prices surged following Israel’s decision to discuss military options, reversing a two-day decline in oil prices.

Market outlook

Closer to home, the FBM KLCI index closed higher on Thursday, gaining 0.4%, even as regional markets showed mixed performances. Bargain hunting among investors emerged following a recent sell-off, particularly benefitting the technology and property sectors. Lower liner stocks showed mixed results. However, the energy sector, which often responds closely to oil price movements, led the day’s declines.

Globally, US markets ended in the red, weighed down by persistent inflation concerns. The European markets also experienced slight declines, continuing a trend of volatile trading for the week. However, Asian markets offered a brighter picture, as Japan’s Nikkei 225 and South Korea’s Kospi posted gains following record highs in US indices the previous day. Chinese and Hong Kong markets also bounced back from sharp sell-offs after China’s central bank announced a $70 billion funding facility, fueling hopes for additional fiscal measures aimed at boosting growth.

Corporate Earnings

Looking ahead, all eyes will be on the corporate earnings releases in the US and an upcoming briefing from China’s Finance Ministry, which could provide further insights into government spending plans that may impact market sentiment across Asia.

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