KUALA LUMPUR: Donald Trump's shock victory to emerge as the new US president sent global markets reeling including Malaysia on Wednesday on worries that prospects of protectionism and lower global growth will hit equity markets and risk assets worldwide.
What a difference the two days had been. On Tuesday, markets rallied on optimism about Democrat Hillary Clinton's winning the election and sent markets higher but investors' hopes crashed early Wednesday as Trump headed for victory.
At Bursa Malaysia, the FBM KLCI managed to close off the day's low of 1,640.85. It fell 16.2 points or 0.97% to 1,647.62. Turnover surged to 2.51 billion shares valued at RM2.39bil. The broader market was weaker with decliners beating advancers 807 to 165 while 265 counters were unchanged.
Asian markets closed lower, with Japan's Nikei 225 the worst hit, down 5.36% to 16,251.54.
European shares fell as Trump's victory brought uncertainty that roiled global markets. However, the market rallied off its lows, with traders saying Trump's acceptance speech was balanced and conciliatory, raising hopes that some of the more fiery rhetoric of his campaign might be behind him, Reuters reported.
Schroder Investment Management said on Wednesday it expected volatility to likely impact markets as the low interest rate environment unwinds.
“This is unlikely to be favourable for markets: bond yields may rise as investors seek greater compensation for inflation risk, while equity markets are expected to de-rate.
“More broadly, the prospect of protectionism and lower global growth will hit equity markets and risk assets worldwide. Emerging markets are particularly vulnerable given their dependence on global trade,” it said.
The ringgit weakened against most currencies as crude oil prices fell. It fell to 4.2290 to the US dollar from 4.2017 and slipped against the Singapore dollar to 3.0400 from 3.0237. It fell against the pound sterling to 5.2538 from 5.2233 and was down against the Euro to 4.6967 from 4.6477.
US light crude oil fell 52 cents to US$44.46 and Brent was down 46 cents to US$45.58. Crude palm oil for third month delivery jumped RM15 to RM2,858 per tonne while Godrej International Ltd.’s Dorab Mistry warned that the 30% surge in prices since July may fall 12% by end-Dece,ber and extend to net year as inventories rise.
Axiata fell 14 sen to RM4.70 and erased 2.13 points from the KLCI, Digi and Telekom were down two sen each to RM5.02 and RM6.49 while Maxis shed one sen to RM5.91.
Maybank lost eight sen to RM7.87 and wiped out 1.38 points from the KLCI, Public Bank was down 12 sen to RM19.68, Ambank 10 sen lower at RM4.06, Hong Leong Bank eight sen lower at RM13.12 and RHB Bank was flat at RM15.24.
Among the heavyweights, Genting Bhd
lost 21 sen to RM7.80 and erased 1.34 points, Genting Malaysia lost seven sen to RM4.68, Tenaga shed four sen to RM14.28.
Plantations also fell in line with the weak sentiment even though CPO prices ralied. TAHPS lost 35 sen to RM6.75, Chin Tek 30 sen lower at RM7.60, United Plantations lost 28 sen to RM27.20 and KL Kepong 26 sen down at RM23.60 while PPB Group gave up 10 sen to RM16.
Petronas Dagangan rose four sen to RM23.40 and it was just one out of the two KLCI stocks which posted increases. Petronas Gas and Petronas Chemicals fell four sen each to RM21.98 and RM6.91. SapuraKencana was down eight sen RM1.48.
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