Opening Daily Highlight
Mixed
Cautious start to 2025
Fri, 03-Jan-2025 07:23 am
by Research team • Apex Research

Malaysia Market Review: The FBM KLCI began 2025 on a weak footing, dropping 0.6% on the first trading day, dragged by negative sentiment from Wall Street and weaker economic data from China. Leading the losses were Axiata and Petronas Chemicals, as the impact of the year-end window dressing activities subsided. Sectoral performances were mixed, with the Energy Index (+0.9%) leading the gains, while the Industrial Products and Services Index (-1.3%) and the Transportation and Logistics Index (-1.0%) were the top laggards.

 

Global Markets Review: Wall Street extended its late-2024 slump into the new year despite early session gains. A choppy trading session saw key indices retreat as market participants grappled with persistent macroeconomic uncertainties. Treasury yields remained elevated while the Dollar Index rose above 109, hitting its highest level since November 2022. In Europe, the pan-European Stoxx 600 gained 0.6%, buoyed by strong performances in the energy sector. This came as oil prices rose driven by optimism over China's economy and fuel demand after a pledge by President Xi Jinping to promote growth. Elsewhere in Asia, markets mostly fell. Shanghai Composite plunged 2.7% while Hang Seng Index tumbled 2.2% as Chinese manufacturing activity released on Thursday saw weaker-than-anticipated growth in December, suggesting that the impact of recent stimulus measures is waning. South Korea’s Kospi Index edged down 0.2% amid ongoing political unrest in the country.

 

Market Outlook: We expect the benchmark index to consolidate as investors maintain a cautious stance with foreign funds turning into the net selling position once again. Similarly, lower liners are likely to consolidate amid lack of fresh leads. Looking ahead, investors should brace for a potentially more volatile 2025, as uncertainties surrounding Trump’s second term, geopolitical risks, and the Federal Reserve’s rate cut trajectory are expected to weigh on market sentiment.

 

Sector focus. Export-oriented sectors denominated in USD, such as the technology sector, are likely to attract bargain-hunting activities following the recent rise in the Dollar Index. Meanwhile, the energy sector may continue to garner buying interest, supported by gains in crude oil prices.

 

Technical Commentary: The FBM KLCI took a step back after forming a bearish candle as profit taking activities loomed. We expect a potential consolidation may take shape over the interim. Indicators stayed positive as MACD Line hovered above the Signal Line, while the RSI trended above 50. Immediate resistance is located at 1,645. Support is envisaged around 1,600.

Sentiment: Negative
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Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.461616 4.492488
EUR 4.631791 4.636328
CNY 0.610703 0.611330
HKD 0.573670 0.577678
SGD 3.274754 3.297759