How big is inflation impact on the stock markets

The FBM KLCI continued with its upward trajectory on Friday lifted by the heavyweights especially the
banking stocks.

The benchmark index up 0.23% or 3.65 points to end at 1,601.97 with gainers led by PBBANK, MAYBANK and HLBANK. Market breadth was negative with 538 losers against 385 gainers. Total volume stood at 2.64bn shares valued at RM2.06bn.

Regionally, key indices closed mixed. Nikkei 225 and HSI lost 1.63% and 0.21% to end at 27,105.26 and
20,638.52 respectively. The SHCOMP and STI gained 0.23% and 0.40% to end at 3,086.92 and 3,361.99
respectively.

Fight against inflation

Wall Street tumbled on Friday as investors prepared for the gan global inflation fight with interest rate hikes. The DJIA and S&P500 dived 2.82% and 2.77% to end at 33,811.40 and 4,271.78 respectively. Meanwhile Nasdaq slumped 2.55% to end at 12,839.29.

Wall Street plunged as traders were on a selling spree attributed to a weak set of corporate earnings
coupled with imminent rate hike concerns.

The DJI Average declined by almost 1,000 points while the Nasdaq lost 335 points.

As for the local bourse, the FBM KLCI closed above the 1,600 level last Friday from solid buying support by foreign funds.

“For today, we reckon the index may be faced with some headwinds due to the steep losses on Wall Street with no rebound in sight according to the US futures.

“In view of this, we expect the index to trend within the 1,590-1,605 range amid the heightened volatility. Meanwhile, bearish sentiments on global growth have dragged crude oil prices lower with the Brent crude ending below the US$107/barrel,” says the analyst firm. – RAKUTEN