KUALA LUMPUR: Bursa Malaysia has opened to another day of heavy selling as US President Donald Trump escalated its trade war with the European Union with another round of tariff threats.

The FBM KLCI shed 10.08 points to 1,499.95 at the start of Friday trading, dragged down by the extra weight of the tariffs on the global economy, and heightened fears of a US recession.

Overnight, the S&P500 confirmed a correction after losing 1.4% overnight to register a loss of more than 10% from its February high.

It joins the Nasdaq, which slipped into correction territory last week. After losing 2% in the overnight session, the tech-heavy index has now lost 13.6% since Feb 19.

The downward pressure on the FBM KLCI seeks to undo the rebound in the previous session, sending it back below the 1,500 psychological support.

On Wednesday, the index flirted with a technical correction after hitting a trading low of 1,472, which represented a year-to-date decline of 10%. The index closed off the day's low at 1,484, barely half a percent from correction territory.

CIMB Research said in its strategy report it expects investors to stay defensive with Trump doubling down on plans to implement reciprocal tariffs on US trading partners, scheduled to come into effect on April 2.

It noted that year-to-date, the net foreign outflow in 2025 is RM7.1bil, below the Covid-19-driven record RM24.7bil annual net sell-off by foreigners in 2020.

However, if current foreign selling pressure persists at a similiar scale and is annualised, it could match the severity of the Covid-19 induced sell-down, said CIMB.

"We believe the market needs a catalyst to rebound — this could come from easing trade tensions, strengthening of the RM, better-than-expected corporate earnings, and/or government initiatives to boost stock market performances.

"The low foreign holdings also mean that marginal foreign flows return (or even cessation of selling) could spark a short-term rally in the market."