FBM KLCI retreats after early gains amid profit-taking

[MALAYSIA] The FBM KLCI kicked off the day on a positive note amid relief over a temporary pause in U.S.-China trade tensions, but the early gains proved short-lived as profit-taking set in following the previous session’s strong performance. The benchmark index slipped 3.85 points, or 0.24%, to 1,578.54 by 9.09am, after opening marginally higher at 1,582.39.

Market watchers attributed the early retreat to a mix of profit-taking and cautious investor sentiment, as doubts linger over the durability of the recent rally. While the brief thaw in the trade war provided initial support, the absence of a long-term resolution continues to weigh on market confidence.

Overnight, Wall Street posted mixed results. The Dow Jones Industrial Average slipped 0.64% to 42,140.43, while the S&P 500 rose 0.72% to 5,886.55. The tech-heavy Nasdaq Composite advanced 1.61% to close at 19,010.09.

The diverging performance across U.S. indices reflected sectoral disparities, with technology counters buoyed by robust earnings, while industrial and financial stocks came under pressure amid uncertainty over future interest rate moves. The trend echoed across regional markets, with Malaysia seeing gains in technology-related stocks such as Malaysian Pacific Industries.

On the local bourse, notable gainers included F&N, up 26 sen to RM26.86; DKSH, which added 26 sen to RM5.25; BLD Plantation, climbing 20 sen to RM11.20; and Malaysian Pacific Industries, rising 16 sen to RM21.14.

The strength in consumer and plantation counters suggests a tilt toward defensive plays, as investors seek relative safety amid choppy trading. Analysts highlighted that commodity-linked stocks are benefiting from firmer crude palm oil prices and a more optimistic demand outlook in key export markets.

In contrast, laggards included Heineken Malaysia, which dropped 24 sen to RM27.30; CIMB, down nine sen to RM7.22; Ayer, slipping 10 sen to RM7.70; and Panasonic Manufacturing, easing 10 sen to RM13.90.

Inter-Pacific Research noted that the broader index could still trend higher, supported by renewed buying interest, particularly from foreign institutional investors.

It said improving sentiment in global equity markets, underpinned by progress in the U.S.-China trade situation, is helping lift regional indices. Still, the research house cautioned that foreign fund flows remain volatile due to heightened geopolitical risks — including renewed tensions in the Middle East and fluctuating commodity prices — which could trigger intermittent bouts of selling, especially in high-beta stocks that have recently outperformed.

Inter-Pacific also warned that the recent rally has pushed some technical indicators into overbought territory, potentially limiting further upside. Investors are expected to tread carefully ahead of Malaysia’s first-quarter GDP report due on Friday, which may shed light on the broader economic impact of trade tariffs.

“Any further gains could be constrained, with the market facing potential resistance around the 1,586 to 1,590 range — levels that coincide with the 200-day moving average,” the research house said. It added that the psychological 1,600-point mark remai