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Bloomberg
Malaysian stocks dropped and the ringgit weakened after the government imposed a two-week nationwide lockdown to curb a relentless surge in Covid-19 infections.
The FTSE Bursa Malaysia KLCI Index fell as much as 1.6%, before paring losses to 0.7% at the close in Kuala Lumpur. The ringgit slid as much as 0.4% to 4.1480 per dollar, while 10-year bond yields rose three basis points to 3.25%. The government said that most businesses will be shut from June 1 except for essential economic and service sectors.
“The government is finally biting the bullet,†said Alexander Chia, an analyst at RHB Investment Bank Bhd. “Clearly, there are downside risks to FY21 earnings growth, even if it is essentially a postponement of growth to FY22.â€
Malaysia’s return to a hard lockdown comes in the wake of record daily infections that saw cases top 9,000 over the weekend.
A resurgence in virus outbreaks in Asia has spurred some countries including Vietnam and Singapore to tighten restrictions.