Malaysian stock market seeks recovery amid global uncertainty

[MALAYSIA] Malaysia’s benchmark index opened higher on Friday, offering a glimmer of hope that its recent downtrend may be coming to an end. At 9am, the FBM KLCI advanced 4.91 points to 1,531.93, as investors took a breather from the selling pressure that had persisted over the past six sessions.

The recent volatility in the local bourse has largely been driven by global economic developments. Concerns over the US budget deficit and uncertain interest rate trajectories have rattled regional markets, prompting foreign investors to scale back their positions. This cautious sentiment has been echoed across Asia, with market players gravitating toward safer assets amid prevailing uncertainties.

Despite Friday’s uptick, analysts remain cautious about a sustained recovery. While the FBM KLCI has historically rebounded swiftly from regional downturns, the current landscape is more complex, clouded by prolonged ambiguity over US fiscal policy and its broader implications.

Rakuten Trade noted that the index had slipped below the critical 1,530 mark in the previous session amid widespread regional declines. “We believe foreign funds are retreating from regional markets in response to mounting concerns over the US budget deficit and interest rate outlook,” the brokerage commented.

Local investors continue to keep a close eye on foreign capital flows, given their outsized impact on the KLCI’s direction. The withdrawal of these funds underscores the global shift toward a more risk-averse posture.

“While a rebound is hoped for, we expect the index to trade within the 1,520–1,530 band today,” Rakuten added.

TA Securities echoed a similar sentiment, suggesting that momentum among index-linked counters may slow as investors await further cues from corporate earnings reports and updates on US trade negotiations with key Asian partners.

The forthcoming earnings season is expected to offer insights into how Malaysian corporates are weathering the economic turbulence. Market participants are especially focused on forward guidance, which could shape sentiment heading into the second half of the year.

TA Securities also revised its technical outlook, placing immediate resistance at 1,586, with subsequent hurdles at 1,610 and 1,644. Support levels are seen at 1,526, with stronger floors at 1,490 and 1,444.

In early trading, Maybank recovered six sen to RM9.88 following prior declines. CIMB edged up five sen to RM6.90, while PETRONAS Chemicals added nine sen to RM3.41. Among broader market movers, Tomei gained three sen to RM1.75, Kossan advanced two sen to RM1.67, and AmBank climbed five sen to RM5.39.

Meanwhile, Eco-Shop made its main market debut with a strong showing, jumping 12 sen to an intra-morning peak of RM1.25. Trading volume was brisk, with 28.34 million shares changing hands at the time of writing.