Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said Wall Street finally lost steam after Fitch downgraded the US sovereign rating from AAA to AA+, which sparked a sell-off.
As a result, the Dow Jones Index Average lost 348 points while the Nasdaq declined by 310 points as the US 10-year yield inched higher at 4.09%.
On the home front, the FTSE Bursa Malaysia KLCI (FBM KLCI) retreated further as sentiment turned cautious, attributed to widespread decline among regional markets.
“Though we reckon market sentiment may have been affected by the US downgrade, we believe this presents an excellent opportunity to bargain hunt.
“This is because judging by the last US rating downgrade in 2011, we noticed the equity markets did not experience any prolonged negative reaction.
“Therefore, we expect the index to hover within the 1,440-1,450 range today,” he said.
At 9.10am, the FBM KLCI went down 2.07 points to 1,442.49 from 1,444.56 at yesterday’s close. The key index opened 3.19 points weaker at 1,441.37.
The broader market was negative as decliners surpassed advancers 236 to 95, while 240 counters were unchanged, 1,701 untraded and 13 others suspended.
Turnover stood at 230.06 million units worth RM77.44 million.
Among the heavyweights, Maybank and Public Bank lost 3 sen each to RM8.92 and RM4.10, Tenaga Nasional decreased 4 sen to RM9.53 and Petronas Chemicals fell 1 sen to RM6.74, while CIMB was flat at RM5.47.
Among the actives, Mudajaya added 1.5 sen to 20 sen, MRCB gained 1 sen to 38.5 sen, while UEM Sunrise slid 0.5 sen to 50 sen.
Both Tanco and Leform are flat at 55.5 sen and 21.5 sen.
On the index board, the FBM Emas Index went down 18.95 points to 10,592.7, the FBMT 100 Index weakened by 18.06 points to 10,287.62, the FBM Emas Shariah Index declined 12.22 points to 10,860.23, the FBM ACE Index eased 5.23 points to 5,283.66 and the FBM 70 Index edged down 38.39 points to 13,873.49.
Sector-wise, the industrial products and services index reduced by 0.27 of-a-point to 165.50 and the financial services index slipped by 44.27 points to 16,079.12, and the energy index lost 5.48 points to 826.99.
The plantation index advanced by 26.27 points to 7,127.16.