Soft start on Bursa following Fed comments

KUALA LUMPUR: Investors are continuing to take money off the table following a mixed performance on Wall Street, in response to a slightly dovish message by the US Federal Reserve.

The FBM KLCI dropped one point to 1,574.97 at the open as investors digested the news of the latest Fed guidance.

Overnight, the Fed stayed put on its lending rate as widely expected. Fed chair Jerome Powell said comments following the decision that there is unlikely to be another rate hike, although he said there has been a “lack of further progress” in bringing inflation down to the 2% target.

Investors were heartened by Powell’s remark that the central bank will slow the pace at which it shrinks its bond portfolio, which translates to less upward pressure on bond yields.

On the home front, Apex Securities Research said investors will be anticipating the release of the S&P Global Manufacutring PMI data for Malaysia.

“Sector wise, we are also slightly bearish over the oil and gas sector after Brent oil price sank close to 5% on expectations of a ceasefire agreement in the Middle East.

Meanwhile, the revamped Public Service Remuneration System (SSPA) which bumps overall minimum income for civil servants from RM1,765 to RM2,000 is expected to benefit consumer staples related stocks,” it said in its market outlook.