FBM KLCI holds steady amid global market rally

[MALAYSIA] The FBM KLCI ended the morning session slightly higher as investors turned to profit-taking ahead of the weekend, capping off a week of moderate gains. At the midday break, the benchmark index edged up 0.42 points to 1,506.94, with market participants largely holding onto recent advances made over the past few sessions.

Market strategists observed that the modest uptick reflects a cautious optimism among domestic investors, who continue to weigh the strength of Malaysia’s economic fundamentals against persistent global headwinds. A better-than-expected rise in December’s export figures offered some encouragement, though concerns remain over lingering inflation and uncertain interest rate paths.

Globally, sentiment improved after US President Donald Trump appeared to soften his rhetoric on trade talks with China during a media briefing, raising hopes of renewed dialogue.

The change in tone follows reports of behind-the-scenes negotiations between US and Chinese officials, fueling speculation of a potential pause in hostilities. Still, analysts warned that deep-seated issues—particularly regarding technology restrictions and tariffs—remain unresolved and could reemerge as stumbling blocks.

Positive momentum was further buoyed by a robust earnings report from US tech heavyweight Alphabet, which reinvigorated investor interest in AI and cloud-driven stocks. Wall Street futures climbed in response, pointing to another upbeat session on the back of renewed tech enthusiasm.

Alphabet’s strong quarterly performance sparked a rally in tech counters globally, with investors increasingly favouring companies involved in artificial intelligence and digital infrastructure. This sentiment carried over to regional markets, giving a lift to technology-focused indices across Asia, including in Malaysia.

Asian markets extended their recovery, led by Japan’s Nikkei surging 1.94% to 35,718, while Hong Kong’s Hang Seng advanced 1.36% to 22,206. Shanghai’s Composite Index added 0.15% to 3,302, and Singapore’s Straits Times Index gained 0.1% to 3,834.

A softer US dollar contributed to the regional rally, easing currency pressures and making export-oriented markets more attractive. The ringgit held firm at RM4.18 to the dollar, as Bank Negara Malaysia’s currency stabilization efforts continued to yield gradual results. Back home on Bursa Malaysia, gainers outpaced losers by a ratio of 1.67-to-1, with 1.91 billion shares changing hands for a total value of RM910.44 million.

Notable gainers included YTL Power, which rose seven sen to RM3.34, PETRONAS Chemicals climbing nine sen to RM3.44, and Hong Leong Bank gaining four sen to RM19.90. In the semiconductor segment, Vitrox jumped 15 sen to RM2.85, Pentamaster added 12 sen to RM2.40, and Frontken advanced 12 sen to RM3.51.

The rebound in chip-related stocks reflects strengthening demand for semiconductors, particularly in electric vehicles and connected devices. Industry experts note that Malaysia is well-positioned to benefit from ongoing global supply chain diversification, as more multinational firms look to the country as a strategic base for manufacturing and assembly.