Daily Market Report (3 August 2023)
- Wall Street finally loses steam following Fitch’s downgrade on the US sovereign rating from AAA to AA+ thus sparking a massive sell-off.
- As a result, the DJI Average lost 348 points while the Nasdaq declined by 310 points as the US 10-year yield inched higher at 4.09%.
- Over in Hong Kong, the HSI slumped by almost 500 points on concerns over China’s property sector after July’s home sales came in worse than expected.
- Sentiment was further eroded as domestic banks were roped in to adjust existing mortgage rate and trim down payment ratios to assist the ailing property sector.
- On the home front, the FBM KLCI retreated further as sentiment turned cautious attributed to widespread decline amongst the regional markets.
- Though we reckon market sentiment may have been affected by the US downgrade, we believe this present an excellent opportunity to bargain hunt as judging by the last US rating downgrade in 2011, we noticed the equity markets did not experience any prolonged negative reaction.
- Therefore, we expect the index to hover within the 1,440-1,450 range today.
