Cautious Regional Sentiment as Fed Hawk Talk Impacts Asia

February 5, 2026
Global Markets
Reuters

Asian markets broadly declined today, influenced by hawkish comments from US Federal Reserve officials suggesting prolonged higher interest rates. Singapore's Straits Times Index fell 0.8%, and Hong Kong's Hang Seng Index dropped 1.5%, creating a cautious backdrop for Bursa Malaysia. This regional weakness limited KLCI's upside.

Asian equity markets broadly came under pressure today, primarily influenced by recent hawkish remarks from US Federal Reserve officials. These statements suggested that the Fed might maintain higher interest rates for a longer duration, fueling investor concerns about a potential slowdown in global economic growth. Singapore's Straits Times Index declined by 0.8%, while Hong Kong's Hang Seng Index saw a more significant drop of 1.5%, reflecting the cautious sentiment across regional markets. This external pressure had an indirect impact on Bursa Malaysia, limiting the upside potential of the FBM KLCI. Despite support from local banking stocks, overall trading volume was constrained by the prevailing regional mood. Analysts suggest that regional markets are likely to remain volatile until there is greater clarity on the Fed's policy trajectory.
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