KUALA LUMPUR: A fresh bout of selling is pressuring the FBM KLCI below the 1,600 psychological support as investors reacted to more evidence that inflation in the US is seeing a resurgence.
At the start of Monday trading, the benchmark index opened 3.45 points lower at 1,598.96, affirming that bearish sentiment continues to grow on the market.
Rakuten Trade in its market outlook noted that Asian equities markets have been under pressure as US Treasury yields continue to rise on expectations that the Federal Reserve will not cut interest rates again before July due to the lingering risk.
It said its outlook on the domestic market remained cautious despite gains in the benchmark index as external factors continued to weigh on investor sentiment.
"On the other hand, cheap valuations may attract investors to buy on dip, hence we anticipate the benchmark index to trend within the range of 1,600-1,610 for today," it added.
Malacca Securities Research said in its report that traders may focus on the oil and gas sectors amid the surge in Brent crude oil prices and export-oriented stocks, which could benefit from the strengthening dollar.
However, it expects the upside of technology stocks to be limited following the announcement of further US restrictions on AI chip exports to Malaysia.
"Nevertheless, we believe domesticthemed plays may take the lead in the near term ahead of Trump’s inauguration January 20. Key themes to watch include JSSEZ initiative, Penang’s ongoing LRT
project and potential emergence of Sarawak as an energy hub," the research firm added.
As the market continued to slip, lagging blue chips included Sunway down 11 sen to RM4.51, YTL Power plunging 18 sen to RM4.08, PPB shedding 12 se nto RM12.08 and PETRONAS Gas slumping 14 sen to RM17.50.
Of actives, Key Alliance Group was down 0.5 sen to 0.5 sen, Velocity dropped 0.5 sen to eight sne and JCY slid three sen to 50 sen.
