New Zealand Shares Edge 0.1% Lower for Third Straight Loss — Market Talk

By Ying Xian Wong

KUALA LUMPUR--Malaysia's consumer-price growth slowed in the final month of 2024, bringing the full year rate to a cool 1.8% as monetary policy and government subsidies kept prices in check.

The annual reading is down from the 2.5% seen in 2023, marking a second year of cooling inflation and signaling that the country has succeeded in taming price pressures even as it began unwinding subsidies and navigated geopolitical shocks.

Malaysia's consumer price index rose 1.7% from a year earlier in December, the Department of Statistics said Wednesday. That compared with the forecast for a 1.8% rise compiled in a survey of six economists by The Wall Street Journal.

Last year's inflation trends have been in line with the central bank's expectations, suggesting that it will keep holding the policy line when it meets this afternoon. However with markets nervous about fresh political uncertainty as the U.S. administration begins to announce policy changes, what Malaysia's central bank says about the outlook for the year ahead will be closely watched.

At home, the impending reform of RON95 fuel subsidies could stoke inflationary pressures by pushing retail prices higher. J.P. Morgan analysts in a recent report estimated that the changes could raise headline inflation to 3% in 2025, though they expect limited impact on core inflation due to weak corporate pricing power.

Malaysia's Economy Minister Rafizi Ramli in a recent interview said he anticipates inflation to trend toward the lower end of the target range, at "around 2%-plus," in 2025. He emphasized that the subsidy cuts will only target top earners, allowing funds to be redirected toward other programs while keeping prices affordable for the most price-sensitive consumers.

December's data showed that prices of food and non-alcoholic beverages, which have a nearly 30% weighting on the consumer price index, rose 2.7% on the year.

Core inflation, which strips out volatile prices of fresh food as well as prices of government-administered goods, increased to 1.6% in December from a year earlier.

On a monthly basis, consumer prices rose 0.1% last month, the same pace as in November.

Below are the inflation figures for Malaysia by sector in December:

 
                               % Change MoM   % Change YoY 
CPI                                      0.1           1.7 
 
Sector                          Index Weighting   % Change YoY 
Food & Beverages                         29.80%           2.7 
Housing, Utilities & Fuels               23.20%           3.2 
Transport                                11.30%           0.4 
Information & Communication               6.60%          -5.4 
Personal Care, Social Protection& 
Miscellaneous Goods & Services            5.80%           3.2 
Furnishings, Household Equipment 
& Routine Household Maintenance           4.30%           0.4 
 

Write to Ying Xian Wong at yingxian.wong@wsj.com

The Shanghai Composite dropped 1% to around 3,210 while the Shenzhen Component tumbled 1.1% to 10,185 on Wednesday, with the former hitting a one-week low after US President Donald Trump said his team was discussing a 10% tariff on goods imported from China that could take effect as early as Feb. 1.

Trump’s comments overshadowed a more positive development from Friday, when he had an amicable phone call with Chinese President Xi Jinping, during which they discussed trade and fentanyl, among other topics.

At the World Economic Forum, Chinese Vice Premier Ding Xuexiang emphasized that there are no winners in a trade war and called for greater international economic cooperation.

Notable losses included Seres Group (-3.8%), ZTE Corp (-1.5%), East Money (-1.5%), Contemporary Amperex (-2.6%), and Fivocom Wireless (-4.4%).

The dollar index held around 108.1 on Wednesday, holding a recent decline amid lingering uncertainty on US President Donald Trump’s tariff plans.

Trump indicated on Tuesday that he is considering a 10% tariff on goods imported from China, set to begin on February 1, just one day after threatening Mexico and Canada with tariffs of approximately 25%.

However, none of these threats have been turned into policy yet, fueling hopes that the administration may take a more cautious approach to tariffs, which could help mitigate inflation risks.

The dollar has been on an upward trajectory since October, driven by concerns that Trump’s "America First" policies and pro-growth stance might lead to higher inflation, potentially preventing the Federal Reserve from implementing further rate cuts.

Despite this, markets still expect the Fed to lower rates by July, with the possibility of another reduction later in the year.

Shares in Hong Kong slipped 319 points or 1.6% to 19,787 in early trade on Wednesday, ending gains in the prior six sessions after US President Trump said he could impose a 10% tariff on all Chinese imports, despite excluding China from the list of countries he planned to target immediately just a day earlier.

The Hang Seng withdrew from its highest in nearly four weeks, burdened by broad-based weakness.

Still, gains on Wall Street overnight helped limit further losses, as Trump is expected to announce a new investment push for AI, led by big firms including Softbank Group Corp., OpenAI, and Oracle.

At home, the annual inflation rate in Hong Kong was at 1.4% in December, keeping unchanged for the third month and staying at its lowest since May.

Early laggards included KE Holdings (-3.2%), JD Logistics (-2.6%), and Longfor Group (-1.7%).

Meantime, Geely Auto sank 1.8% despite planning to partner with Handal Motor to build a second-phase factory in Indonesia and start operation by Q3.

The benchmark KOSPI rose 0.7% to around 2,537 points on Wednesday, reversing losses from the previous session, buoyed by Wall Street gains following US President Donald Trump's less aggressive stance on tariffs.

Meanwhile, South Korea's Industry Ministry met with businesses Wednesday to address US export risks under Trump’s second term and brief exporters on trade policies.

Traders now braced for some major corporate earnings later this week.

Among key stock indexes, chip giant SK Hynix and automaker Hyundai Motor advanced 0.2% and 0.7%, respectively, ahead of their earnings result due tomorrow.

Notable gains were also seen from LG Energy Solutions (1.6%) and Samsung Biologics (2.8%).

On the economic data front, South Korea’s consumer confidence edged up to 91.2 in January 2025 from 88.2 in December, reflecting a modest improvement in economic sentiment.

The benchmark KOSPI rose 0.7% to around 2,537 points on Wednesday, reversing losses from the previous session, buoyed by Wall Street gains following US President Donald Trump's less aggressive stance on tariffs.

Meanwhile, South Korea's Industry Ministry met with businesses Wednesday to address US export risks under Trump’s second term and brief exporters on trade policies.

Traders now braced for some major corporate earnings later this week.

Among key stock indexes, chip giant SK Hynix and automaker Hyundai Motor advanced 0.2% and 0.7%, respectively, ahead of their earnings result due tomorrow.

Notable gains were also seen from LG Energy Solutions (1.6%) and Samsung Biologics (2.8%).

On the economic data front, South Korea’s consumer confidence edged up to 91.2 in January 2025 from 88.2 in December, reflecting a modest improvement in economic sentiment.