(Updated)

Bursa Technology index falls the most after Nasdaq ends sharply lower

Bursa Technology index falls the most after Nasdaq ends sharply lower
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KUALA LUMPUR (Oct 5): Bursa Malaysia’s Technology Index fell the most in percentage terms on Tuesday (Oct 5) among bourse gauges after the Technology Index dropped nearly 1% following the US’ technology share-laden Nasdaq’s sharp decline at over 2% in Monday overnight trades.

At Bursa on Tuesday, the Technology gauge, which tracks share prices of companies including semiconductor manufacturers, was down 0.76 points or 0.79% at 95.1 at 11:59am.

Overnight, it was reported that Wall Street ended sharply lower on Monday as investors dumped Big Tech and other growth stocks in the face of rising Treasury yields, while concerns about a potential US government debt default also fed caution.

It was reported that Apple, Microsoft, Amazon and Alphabet, the US stock market's four most valuable companies, each dropped more than 2%.

"Facebook, the fifth most valuable company, slumped almost 5% after its app and its photo-sharing platform Instagram were down for thousands of users, according to outage tracking website Downdetector.com,” Reuters reported.

At Bursa on Tuesday, top decliners included Technology Index constituents Malaysian Pacific Industries Bhd (MPI) and UWC Bhd.

At 12:22pm, MPI’s share price slid 74 sen or 1.65% to RM44.06 while UWC was down 15 sen or 2.43% to RM6.03.

TA Securities Holdings Bhd analysts wrote in a note on Tuesday that on Monday (Oct 4), although the FBM KLCI closed lower, the technology sector rose 1.5% on positive demand outlook.

“[Malaysian] stocks should continue to drift sideways pending more policy clarity and positive domestic leads, as concerns over rising global inflation and weaker domestic economic recovery drag sentiment,” TA Securities said.

Globally, it was reported that Asian shares suffered heavy losses early on Tuesday following a broad sell-off on Wall Street, as markets fretted about the impact of multi-year high oil prices at a time when supply chain disruptions are already putting pressure on economic activity.

It was reported that MSCI's broadest index of Asia-Pacific shares outside Japan dropped as much as 1.3%, falling for a third consecutive session. 

"Investors are clearly worried about inflation due to supply chain disruptions and the rally in energy prices," Vasu Menon, executive director of investment strategy at OCBC Bank, was quoted as saying by Reuters.

"We have seen tech stocks outperform value stocks, so if inflation remains a worry, then tech stocks tend to get hit," Menon said.

Chong Jin Hun