KLCI hovers near 1,500 amid cautious investor sentiment

[MALAYSIA] The FBM KLCI hovered near the psychologically significant 1,500 mark in early trade, buoyed by lingering gains and a modest improvement in investor sentiment. At the opening bell, the benchmark index advanced 2.68 points to 1,502.08, momentarily breaching the resistance level before pulling back to hover around the threshold.

Market watchers have long regarded the 1,500 level as a key psychological barrier, often prompting either profit-taking or fresh buying interest, depending on broader market cues. The cautious tone follows mixed performances across regional bourses, with Singapore’s Straits Times Index inching higher, while Indonesia’s Jakarta Composite remained muted amid persistent global economic uncertainties.

Rakuten Trade attributed last Friday's rally—which nudged the KLCI towards the 1,500 line—to reduced trading activity due to closures in major global markets.

“With markets resuming normal operations today, we anticipate traders may opt to lock in profits, potentially keeping the index range-bound between 1,490 and 1,500,” the firm said in a morning note.

Economic concerns remain a drag on sentiment. Analysts caution that although Malaysia’s exports have shown resilience, they face headwinds from weakening global demand and volatile commodity prices. These factors may pressure corporate earnings, especially in sectors like plantations and technology, which have played pivotal roles in supporting the index.

TA Securities, however, offered a more optimistic view, citing positive technical signals from last week’s rebound as a potential driver for short-term momentum. That said, it noted the sustainability of the gains remains uncertain due to a lack of strong buying interest in domestic markets.

“Lingering geopolitical concerns—particularly the unpredictability of former US President Donald Trump’s tariff policies and intensifying US-China tensions—are likely to continue weighing on investor confidence,” the firm added.

On the currency front, the ringgit remained steady against the US dollar, buoyed by stabilizing oil prices and cautious optimism surrounding Malaysia’s economic outlook. A firmer ringgit may benefit sectors reliant on imports, though exporters could see narrowing margins if the trend persists.

In terms of technical outlook, resistance for the index has been revised upward to 1,527, corresponding to the 50% Fibonacci retracement (FR) from the June 2023 low of 1,369 to the August 2024 peak of 1,684. Additional resistance levels are noted at the 61.8% FR (1,564) and 76.4% FR (1,610). Immediate support has also been lifted to the 23.6% FR at 1,444, with stronger support seen at the 1,400 mark and the June 2023 low of 1,369.

In early movers, Oriental Interest surged 12 sen to RM1.40, United Plantations gained 10 sen to RM22.88, and Genting Plantations rose nine sen to RM5.04. Among actively traded counters, Ingenieur remained flat at four sen, Jiankun was unchanged at three sen, and ECA inched up 0.5 sen to 18 sen.