FBM KLCI opens higher post-holiday amid cautious market sentiment

[MALAYSIA] The FBM KLCI got off to a good start in early trade on Wednesday, as trading resumed after the two-day Hari Raya Aidilfitri vacation. The FBM KLCI increased 5.68 points, or 0.38%, to 1,519.33 at 9.13 a.m. The index started 3.49 points higher at 1,517.14.

Market analysts noted that the slight uptick could be attributed to bargain-hunting activities after the holiday lull, particularly in blue-chip stocks that had seen recent corrections. However, lingering uncertainties over global trade policies and domestic economic indicators kept gains in check. The trading volume is quite low at 233.07 million shares, valued RM150.9 million.

PETRONAS Dagangan gained 28 sen to RM18.56, Ajinomoto gained 22 sen to RM14.80, Malaysia Smelting Corp climbed 16 sen to RM2.71, and Teck Guan Perdana added 16 sen to RM1.77.

Sector-wise, consumer and energy stocks led the early gains, supported by stable commodity prices and renewed buying interest. Analysts, however, cautioned that the sustainability of this momentum remains uncertain, given the mixed signals from regional markets and fluctuating crude oil prices.

Nestle dropped RM1.08, Malaysian Pacific Industries sank 70 sen to RM18.40, F&N fell 48 sen to RM23.82, and Allianz slipped 20 sen to RM18.10. Overnight, the S&P 500 rose 0.38% to 5,633.07 points, while the Nasdaq Composite soared 0.87% to 17,449.89. The Dow Jones Industrial Average slipped 0.03% to 41,989.96.

Regional markets showed a mixed performance, with Japan’s Nikkei 225 rising marginally on a weaker yen, while China’s Shanghai Composite dipped amid concerns over slowing industrial output. This divergence underscores the cautious sentiment prevailing across Asian equities as investors weigh the impact of U.S. trade policies.

According to Inter-Pacific Research, market conditions are anticipated to remain cautious ahead of President Trump's tariff pronouncements later today, which might hurt Malaysian exports to the US as well as companies with major export exposure to the US.

As a result, the overnight recovery in several of the leading global stock indices is unlikely to permeate to stocks on Bursa Malaysia, as emotions remain influenced for the time being.

"Market interest is also expected to remain thin due to the lack of domestic leads and many market players are still on the festive break," according to the report.

Adding to the cautious outlook, economists highlighted that Malaysia’s trade-dependent sectors, particularly electronics and palm oil, could face heightened volatility if the new U.S. tariffs target key export categories. This has led some institutional investors to adopt a wait-and-see approach until clearer policy directions emerge.

The research firm stated that the bearish bias will stay for the time being as market participants anticipate the tariff announcement, which could force the FBM KLCI constituents to continue to fall.

On the downside, supports are at 1,510 points and 1,502-1,506 points. Inter-Pacific claimed that the resistances are at 1,520 and 1,525 points, respectively.

Meanwhile, Rakuten Trade predicts the FBM KLCI will recover quickly because it must trend over the 1,530 mark as soon as possible or it will remain in a consolidation phase gain.

“For today, we expect the index to hover between the 1,515-1,530 range,” it said.