KUALA LUMPUR (April 3): Malaysian stocks fell on Thursday amid Asia-wide market decline, following reciprocal tariffs announced by the US against its trading partners. The ringgit weakened slightly. 

The benchmark FBM KLCI, which opened 9.22 points or 0.6% lower at 1,517.30 points, saw a modest rebound before midday but dropped again in the afternoon session, with the decline expanding to as much as 0.93%. It then recovered some losses in the final 20 minutes of trading to close 0.5% lower at 1,518.91. 

Despite the broader market decline, glove stocks rallied as investors cheered Malaysia's lower tariffs than the 34% levy on China, home of most of their manufacturing rivals.

This pushed the Bursa Malaysia Healthcare Index up 2% to become the day's best-performing sector, as constituents like Kossan Rubber Industries Bhd (KL:KOSSAN) surged 9.8% to RM1.80 and Hartalega Holdings Bhd (KL:HARTA) rose 8.6% to RM2.02. Supermax Corporation Bhd (KL:SUPERMX) gained 8.4% to 77.5 sen, while Top Glove Corporation Bhd (KL:TOPGLOV) advanced nearly 5% to 84.5 sen.

“I bet the market will take it neutral or negative before picking up after the dust settles,” said Danny Wong, who manages RM5 billion worth of assets as the chief executive officer of Areca Capital Sdn Bhd.

Malaysian exports could gain a larger slice of the US market while losing some share in non-US markets, Wong said. Overall, the less severe tariff than other exporting nations appears positive for Malaysia, he added.

Overnight, US President Donald Trump announced in an executive order a 24% tariff on goods imported from Malaysia effective April 9 in a sweeping trade policy hitting all of its trading partners. 

The rate of tariffs range from 10% to 50%. A baseline 10% will apply to all goods entering the US effective April 5, while the higher duties will start April 9. 

The ringgit weakened slightly, tracking the decline of most exporting nations’ currencies against the US dollar, before rebounding after 4.30pm to trade 0.24% higher against the US dollar at 4.443.

The ringgit is expected to face depreciation pressures, said UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan. In the near term, the tariffs are likely to provide a temporary boost to US dollar by reducing imports and increasing demand for made in US goods, he said.

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