Malaysian stocks gain on US-India trade deal optimism

[MALAYSIA] The Malaysian stock market opened slightly higher on Tuesday, tracking gains on Wall Street overnight amid renewed optimism that the United States is close to finalizing a trade pact with India.

Global investor sentiment improved following reports that Washington and New Delhi are nearing a deal that could reduce tariffs on key goods such as electronics and pharmaceuticals. Analysts say a concluded agreement could ease global supply chain strains and provide a lift to export-oriented economies like Malaysia, which maintains robust trade links with both nations.

At 9am, the FBM KLCI edged up 2.51 points to 1,518.07, recovering part of the previous day’s losses but remaining constrained below the 50-day simple moving average. TA Research said Bursa Malaysia is likely to rebound today, buoyed by rising optimism around the potential US-India trade breakthrough.

Investors are also keeping a close watch on the US Federal Reserve’s forthcoming interest rate decision. Although the prospect of elevated US rates has dampened sentiment across emerging markets, any hint of a dovish stance from the Fed could support further gains in regional equities, including Malaysian stocks.

"Immediate resistance remains at 1,527, representing the 50% Fibonacci Retracement (FR) from the June 2023 low of 1,369 to the August 2024 peak of 1,684," TA Research noted in its technical outlook. "Further resistance levels are at the 61.8% FR (1,564) and the 76.4% FR (1,610), while immediate support stands at the 23.6% FR (1,444), with stronger support at the psychological 1,400 mark and the 1,369 low."

Malacca Securities observed that gains may be limited ahead of Wednesday's Labour Day holiday, which will shorten the trading week. Investors are also looking ahead to Malaysia’s first-quarter GDP report due next week. Better-than-expected economic growth could bolster confidence in domestic stocks, particularly in the resilient consumer and banking sectors.

In its sectoral outlook, the brokerage noted some technology counters such as SNS, Dufu Technology, and ViTrox are forming round bottom patterns, indicating potential bullish setups.

Solar-related stocks are also gaining traction, supported by long-term growth prospects under the National Energy Transition Roadmap (NETR). Government incentives—such as tax breaks for solar panel manufacturers—have further spurred investor interest. Companies like Solarvest and Samaiden have seen a pickup in trading activity.

Additionally, Malacca Securities highlighted MYEG as a counter to watch following its partnership with MIMOS to launch the Malaysia Blockchain Infrastructure (MBI), aimed at advancing blockchain and digital asset adoption across sectors. Among gainers, Nestle rose 92 sen to RM85.14, Cyberview added 26 sen to RM2.35, and Kawan climbed nine sen to RM1.47. Top active stocks included Nationgate, up five sen to RM1.33, Velesto adding 0.5 sen to 15.5 sen, while Avangaad was unchanged at 27.5 sen.