Malaysian stock market stagnates amid investor uncertainty

[MALAYSIA] Malaysia’s benchmark stock index opened Tuesday with minimal change, reflecting a wait-and-see stance among investors as the local corporate earnings season approaches its final phase. The FBM KLCI edged up just 0.94 points to start at 1,535.24, continuing a sideways trajectory amid a lack of fresh catalysts, exacerbated by the closure of U.S. markets for Memorial Day.

The market’s current stagnation mirrors a broader global trend of investor caution, fueled by geopolitical tensions and economic unpredictability. Uncertainty stemming from ongoing trade disputes between the U.S. and key partners has made investors wary of taking bold positions—especially in emerging markets like Malaysia, where foreign capital plays a pivotal role in shaping sentiment and liquidity.

Despite the market holding its ground at the open, a downward bias persists as consolidation drags on. Analysts suggest the weak sentiment and underwhelming first-quarter earnings are prompting investors to pare back positions in Malaysian equities. Key sectors such as banking and consumer goods have underperformed, further weighing on market morale. Banking stocks have slipped amid concerns over tepid loan growth and fluctuating interest rates, while consumer-facing companies are grappling with rising input costs and tepid demand.

Rakuten Trade observed a marginal decline in the FBM KLCI in the previous session, attributing it to ongoing foreign fund outflows.
“These short-term trades by foreign investors are likely to prolong the consolidation phase of the benchmark index,” the firm noted.

The influence of foreign investment on the local bourse remains significant. As an emerging economy, Malaysia depends heavily on external capital, and any pullback can sharply impact both sentiment and valuations. Market watchers are keeping a close eye on foreign fund flows as a key determinant of near-term market direction.

TA Securities Research pointed to investor uncertainty over U.S. President Donald Trump’s unpredictable tariff policy, particularly his recent announcement of a 50% hike on EU imports—now delayed until early July.

“Investors are expected to tread cautiously, scaling back commitments until the final round of earnings is released this week and more clarity emerges on U.S. trade negotiations,” the brokerage stated.

Technical indicators suggest immediate resistance at the recent high of 1,586, with further barriers at 1,610 and 1,644. Support levels are seen at 1,526, with stronger chart support at 1,490 and 1,444.

The upcoming batch of corporate results is expected to play a decisive role in shaping investor sentiment. Market participants are looking for earnings surprises that could lift the current gloom. Simultaneously, any breakthroughs in U.S. trade talks could inject fresh optimism into global markets.

Among notable movers following earnings disclosures, Maybank slipped four sen to RM9.88, while MBMR also shed four sen to close at RM5.64. Gas Malaysia dropped seven sen to RM4.08, and Nestle fell 28 sen to RM79.32. In terms of active counters, NexG gained one sen to 37.5 sen, OCR remained unchanged at 3.5 sen, and Velesto held steady at 17 sen.