Bursa Malaysia rises as investors await Bank Negara rate decision

[MALAYSIA] Blue-chip stocks on Bursa Malaysia saw modest gains as investors held their breath ahead of Bank Negara's interest rate decision, following the US Federal Reserve’s move to keep rates unchanged.

The benchmark FBM KLCI inched up by 0.41 points, closing just above the crucial 1,550 mark at 1,550.21. This uptick signals that recent buying momentum may persist, driven in part by the US markets’ positive response to the Fed's decision.

Market experts observe that the Fed's decision to keep rates steady has provided some temporary relief to emerging markets, Malaysia included, as it lessens the immediate pressure on capital outflows. However, lingering uncertainties surrounding global trade tensions and fluctuations in commodity prices continue to weigh on investor sentiment, limiting broader market gains.

Wall Street saw a late rally overnight, bolstered by warnings from the US central bank about inflation and the potential risks posed by the President’s tariffs on jobs and the economy.

In Malaysia, most economists expect Bank Negara to maintain the current overnight policy rate, although a few predict a 25 basis-point cut as a precautionary measure against the risks tied to US tariffs.

The central bank's rate decision will be closely scrutinized for any signals regarding Malaysia's economic outlook, especially after recent data indicated a slight slowdown in export growth. A decision to hold rates could reflect confidence in domestic economic conditions, while a rate cut might be viewed as an attempt to shield the economy from external challenges.

Meanwhile, TA Securities Research forecasts further gains for stocks, fueled by optimism after news that US and Chinese officials are set to resume formal trade talks this week.

The revival of trade discussions between the world’s two largest economies has sparked cautious optimism in regional markets, with hopes that easing trade tensions could benefit export-dependent economies like Malaysia. Still, analysts remain wary, noting that past negotiations have often been derailed, and any failure to reach an agreement could trigger renewed market volatility.

"Immediate resistance remains at 1,564, which represents the 61.8% Fibonacci retracement of the rally from the 1,369 low in June 2023 to the 1,684 peak in August 2024. The next upside levels are seen at the 76.4% retracement (1,610) and 1,644," the research team said.

"Immediate support is pegged at 1,490, the 38.2% retracement level, with stronger support seen at 1,444 (23.6% retracement) and the psychological level at 1,400," it added in their commentary.

Among the stocks seeing early interest were PETRONAS Dagangan, which climbed 38 sen to RM19.76, PETRONAS Gas, which gained 8 sen to RM17.36, and YTL Corp, which added 6 sen to RM2.11.

SD Guthrie surged by 10 sen to RM4.66 following positive earnings results, while Frontken saw an increase of 6 sen to RM3.75. Among the most actively traded stocks, Jiankum rose by 0.5 sen to 3 sen, Fibromat dropped by 8.5 sen to 46.5 sen, and Nationgate advanced by 4 sen to RM1.53.