KLCI slips at opening bell after hot US inflation fuels rate hike fears

KUALA LUMPUR - The Malaysian stock market, represented by the FTSE Bursa Malaysia KLCI, opened lower on Wednesday due to a surge in US inflation data driving concerns about possible rate hikes. By 9:10am, the KLCI had fallen by 3.94 points to 1,600.13, down from its previous close of 1,604.07. The index began the day at 1,602.05, with market breadth signaling more losses than gains, as 145 stocks declined while 136 rose.

Two hundred sixty counters remained unchanged, 2,774 were untraded, and 12 were suspended. Turnover reached 271.32 million units, valued at RM84.19 million. The US Consumer Price Index (CPI) rose 0.4% month-over-month in October, surpassing the predicted 0.3% increase, according to Rakuten Trade Sdn Bhd’s equity research vice-president, Thong Pak Leng.

This unexpected hot data raised the likelihood of an upcoming December rate hike by the Federal Reserve. Federal Reserve Governor Christopher Waller hinted that the central bank might consider a 50-basis-point increase when they meet again on December 8 and 9. Despite this, market sentiment remained cautious, though some analysts expected short-term bargain hunting, predicting the index would trade between 1,600 and 1,615 points.

Among the affected major companies, Maybank, CIMB, and Tenaga Nasional all experienced losses, while Public Bank and IHH Healthcare saw gains. Within active trades, SKA Capital, MMAG Holdings, and several other firms also recorded gains and losses. Other indices, including the FBM Emas, FBM Top 100, FBM Emas Shariah, FBM ACE, and FBM Mid 70, saw declines, with varying degrees of impact.

Sector-wise, the Financial Services Index, Plantation Index, Industrial Products and Services Index, and Energy Index all saw decreases.