Trading sentiment on the Bursa Malaysia was lacklustre Thursday. There were little in terms of fresh development to stimulate buying. Sentiment may also have been dampened by losses in key regional markets. The local bourse will likely remain range bound in the near term.Asian markets traded mixed with Japan’s Nikkei index closing higher, catching up on regional gains after its three-day holiday break. Bellwether indices in Hong Kong, Singapore, Taiwan and South Korean markets, on the other hand, ended in the red – mirroring overnight losses on Wall Street.
The Dow Jones Industrial Average flitted between positive and negative territories before closing lower overnight. As expected, the US Federal Reserve kept interest rates unchanged at near zero levels and indicated that they will remain so for an extended period given the fragility of the economic recovery.
Concerns over the strength of the recovery were further underlined by the unexpected jump in US oil stockpiles. Market analysts were expecting a decline. Crude oil futures dropped to near US$68 per barrel in electronic trading on the New York Mercantile Exchange.
Prices for key commodities moved in tandem with equities Thursday. Commodity prices, in general, have rebounded strongly from the lows earlier in the year as outlook for the global economy improved. Prices were also boosted by weakness in the US dollar.
Crude palm oil (CPO) futures on the Bursa Derivatives too traded lower, falling near RM2,100 per tonne. Sentiment for the commodity has weakened in recent weeks on expectations of bumper soybean harvest in the US. Soyoil is the primary substitute for CPO. CPO production is also seasonally stronger towards the later part of the year, raising some concerns of higher stockpiles.
The FBM KLCI traded within a narrow range throughout the day. The benchmark index closed marginally lower at 1,218.1. Losing stocks outnumbered gaining ones by a ratio of roughly four to three. Some 751 million shares were traded.