KUALA LUMPUR (Feb 19): Stocks on Bursa Malaysia retreated in the mid-morning on Monday after a lacklustre start, against the backdrop of slower-than-expected economic growth of 3% year-on-year in the fourth quarter of 2023.

At 10.05am, the FBM KLCI had shed 0.07% or 1.14 points to 1,532.41.

The top decliners included Heineken Malaysia Bhd, Malaysian Pacific Industries Bhd, Allianz Malaysia Bhd, Pentamaster Corp Bhd, Tenaga Nasional Bhd and YTL Power International Bhd.

Hong Leong Investment Bank Research in its traders brief on Monday said the ongoing February reporting season, upbeat US inflation readings that scaled back investors’ optimism over US Federal Reserve rate-cut expectations, a rebound in the US dollar, as well as the reopening of Shanghai markets after a week-long holiday are anticipated to weigh on sentiment in the near term.

“However, we remain hopeful for a reprieve in the KLCI in the long term, fuelled by: i) increased risk appetite by foreigners for the under-owned Bursa (with foreign shareholding ticked up by 0.1% to 19.6% in January); ii) a brighter earnings outlook for KLCI components (2023:- 0.3%; 2024: +8.2%); and iii) stable earnings growth for S&P 500 amid a soft landing narrative and decelerating inflation expectations (S&P 500's 2023/2024/2025: 0.9%/11%/13%),” it said.

Meanwhile, Reuters reported that Asian shares got off to a slow start on Monday, as fading chances for early rate cuts globally soured the mood, though investors were hoping for Chinese markets to return from holidays with a spring in their step.

A holiday for US markets also made for thin trading, while the latest surge in tech stocks is set to be tested by results from artificial intelligence diva Nvidia on Wednesday, Reuters reported.