FX.co ★ Malaysia Stock Market May Take Further Damage On Thursday

The Malaysia stock market broke its four-day winning streak on Wednesday, with the Kuala Lumpur Composite Index now just below the 1,605-point mark. The downward trend may continue into Thursday, due to uncertainty over interest rate forecasts.

Despite the European markets witnessing a slight increase, and the U.S. markets maintaining a mixed and moderately steady performance, the global outlook for Asian markets remains uninspired. Economic indicators suggest that Asian markets may well follow in the footsteps of their American counterparts.

On Wednesday, the KLCI ended slightly lower, driven by losses from the financial sector. This was, however, somewhat offset by gains from plantation stocks and mixed results from telecommunications companies.

Specifically, the index decreased by 0.93 points or 0.06 percent, closing at 1,604.75. Throughout the day, it traded within a range of 1,602.29 and 1,610.25.

Several key players in the market showed varied performances. Axiata saw a 0.69 percent decrease, while Celcomdigi advanced by 0.73 percent and CIMB Group retracted by 1.03 percent. Dialog Group notably jumped by 1.61 percent, and both Genting and Petronas Gas saw a modest rise of 0.22 percent. IHH Healthcare, on the contrary, closed with a 0.16 percent decline.

Wall Street’s major averages were mixed and opened lower, providing little clarity for international markets. The Dow increased by 0.44 percent, while the NASDAQ dipped slightly by 0.18 percent, and the S&P 500 remained virtually unchanged.

Fears over interest rate outlooks was the main driver behind Wall Street's uncertainty, following recent comments by Minneapolis Federal Reserve President Neel Kashkari. Despite suggesting interest rates should remain at current levels for some time, Kashkari did not dismiss the possibility of another rate increase. Even so, the Federal Reserve is expected to reduce rates in the third quarter, with an 83.5 percent probability according to the CME Group's FedWatch Tool.

Additionally, West Texas Intermediate Crude oil futures for June ended higher at $78.99 per barrel, a 0.78 percent increase. This follows data from the Energy Information Administration showing a rise in crude inventories last week.

Meanwhile, the central bank in Malaysia is about to conclude its monetary policy meeting. It's anticipated to announce its decision on interest rates later today, and it is widely expected to maintain its benchmark lending rate at 3.00 percent.