Malaysia market commentary (19 Dec 2024)

Global markets
Powell cut rates, but hawkish cut! It sent US equities to a sea of red, DJ (-2.58%), S&P (-2.95%) and Nasdaq (-3.62%). Market already fully priced in 25 bps cut but the hawkish tone deteriorated risk sentiment.

Chair Powell said “today was a closer call” whether Fed decided to cut or not. Interest rates may not go down as fast as investor expected. “From here, it's a new phase, and we're going to be cautious about further cuts.”

VIX (1-month S&P500 implied volatility) skyrocketed from 15% to 27% just within overnight. The higher the VIX, the more risk off the market.

Bonds were sold down, sending US 10 years treasury yield from 4.40% to close at 4.52%. Bond futures reduced expectations from 2 cut to only 1 cut of 0.25% in 2025.

The year end outflow was relatively strong, pushing USDMYR to settle higher at 4.4700 (+50 pips).

KLCI continued hovering at 1,600 with lower traded volume of MYR 2.28 billion. Tomorrow will be rebalancing for FTSE indices, effective by day end.

Healthcare sector was champion again overnight, thanks to the rally of SUPERMX (+10.9%) and TOPGLOV (+5.34%).