Bursa Malaysia rallies on US-China trade truce optimism

[MALAYSIA] Bursa Malaysia kicked off Tuesday’s session on a strong footing, catching up with global markets after a weekend break, buoyed by the temporary trade truce between the United States and China.

The FBM KLCI surged 14.89 points, or nearly 1%, to close at 1,561.39, as investors welcomed the 90-day halt on new tariffs agreed by the world’s two largest economies. The agreement, announced at the G20 summit in Buenos Aires, has helped ease global concerns over intensifying trade tensions that have rattled markets throughout the year.

While the truce marks progress, analysts caution that significant structural issues—including intellectual property protection and technology transfers—remain unresolved, suggesting further negotiations lie ahead. Blue-chip stocks broadly advanced, with PETRONAS Dagangan the lone laggard, slipping six sen to RM20.32.

Among the top gainers, Maybank rose 15 sen to RM10.04, CIMB climbed 28 sen to RM7.15, and Gamuda added 12 sen to RM4.62. The rally in banking counters underscores improved sentiment around Malaysia’s economic outlook, as the easing of trade hostilities could boost export-driven industries. Financials, which comprise a substantial portion of the KLCI, are seen as key beneficiaries of potential capital inflows and renewed market confidence.

The index now trades at its highest level since early March. TA Securities highlighted in a technical note that short-term momentum indicators suggest a potential pause for profit-taking, though weekly signals remain positive. A bullish MACD crossover points to a likely continuation of the upward trend.

Gains were also seen across the region, with the Hang Seng Index and Nikkei 225 each rising more than 2% in early trading. The coordinated rally reflects global investor relief following the US-China agreement, though market watchers remain cautious pending further concrete developments in trade negotiations.

TA Securities identified immediate resistance for the KLCI at 1,564—marking the 61.8% Fibonacci retracement of the move from June 2023’s low of 1,369 to August 2024’s peak of 1,684. Subsequent resistance levels are seen at 1,610 (76.4%FR) and 1,644. On the downside, support is pegged at 1,490 (38.2%FR), with stronger floors at 1,444 (23.6%FR) and the psychological level of 1,400.

On the broader market, Inari Amertron stood out, surging 25 sen to RM2.19 on brisk trading volume of 12.74 million shares, making it the most actively traded stock. The rally in tech counters like Inari underscores rising investor confidence in the semiconductor space, which could benefit from improving global trade conditions. As a critical link in the global electronics supply chain, Malaysia may see sustained demand if the US-China détente holds.

Other notable gainers included Nationgate, up eight sen to RM1.66, and Nition VTech, which advanced 3.5 sen to 69 sen.