Bursa Malaysia dips on pre-weekend profit-taking

[MALAYSIA] Bursa Malaysia's benchmark index, the FTSE Bursa Malaysia KLCI (FBM KLCI), opened lower on Friday, down 2.8 points at 1,537.42, as investors took profits ahead of the weekend. The pullback follows a strong rally earlier in the week, fueled by positive earnings from major U.S. tech companies and easing global trade tensions.

Despite the slight dip, market sentiment remains cautiously optimistic. Wall Street's rally overnight, driven by stronger-than-expected earnings from Meta Platforms and Microsoft, provided a positive backdrop for Asian markets. However, investors appear to be consolidating gains ahead of the weekend, leading to the early session's decline.

Analysts suggest that while profit-taking is a natural part of market cycles, the underlying momentum remains positive. "The market is experiencing a healthy correction after a strong run-up," said a market analyst. "Investors are locking in profits, but the broader trend remains upward."

Foreign fund flows have also played a role in shaping recent market trends. According to data from Bursa Malaysia, foreign investors remained net buyers of Malaysian equities for the third consecutive week, contributing RM410 million in net inflows over the past five trading days. The steady interest from overseas funds has provided additional support for the local bourse amid regional volatility.

Meanwhile, local economic indicators continue to offer a mixed picture. Bank Negara Malaysia is set to release its latest monetary policy statement next week, with most analysts predicting a hold on the Overnight Policy Rate. However, inflationary pressures and currency fluctuations remain under close scrutiny, as these factors could influence investor appetite in the short term.

In addition to corporate earnings and economic data, geopolitical developments are also being closely monitored. Tensions in the Middle East and the continuing trade negotiations between China and the United States have created an undercurrent of uncertainty, prompting some investors to adopt a more defensive posture ahead of the weekend.

Sector performance was mixed in early trading. The financial services and industrial products sectors saw modest declines, while the energy sector gained ground, supported by rising oil prices. Heavyweights such as Maybank, Petronas Chemicals, and IHH Healthcare experienced slight declines, contributing to the index's pullback.

Small-cap and technology counters showed relative resilience in morning trade, with several locally-listed tech firms posting modest gains. Analysts attributed this to continued optimism surrounding digitalization trends and government initiatives aimed at bolstering Malaysia’s position in the semiconductor supply chain.

Technical analysts have also pointed to key resistance and support levels on the FBM KLCI. “If the index manages to hold above the 1,530 support, we could see further upside next week,” said a technical strategist from a local brokerage. “However, a break below this level might indicate a deeper correction, especially if external headwinds persist.”

Looking ahead, market participants will be watching for further developments in global trade and corporate earnings, which could influence investor sentiment and market direction.