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Cautious Outlook amid Global Volatility
Fri, 06-Jun-2025 07:09 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: FBM KLCI closed higher at 1,518.12 (+0.7%), driven by continued bargain hunting following last week's sell-off. Sector-wise, Financial Services was the only laggard (-0.1%), reflecting concerns over potential yield curve repricing and margin compression risks if the U.S. Federal Reserve adopts a more dovish stance than previously anticipated. Meanwhile, Technology and Utilities were the largest gainers, rising by +2.2% and +2.0% respectively.

 

Global Markets Review:  Wall Street ended lower on Thursday, with the Dow down -0.2%, S&P 500 off -0.5%, and Nasdaq falling -0.8%. The decline was largely attributed to a sharp -14% plunge in Tesla shares, losing its trillion-dollar market cap amid a public feud between CEO Elon Musk and former President Donald Trump. In contrast, Europe's STOXX 600 gained +0.1% after the ECB’s decision to cut rates by 25 basis points. Asian markets were mixed, South Korea's Kospi advanced +1.5% on the new government's capital market reforms and a likely July budget. Japan's Nikkei 225 fell -0.5%, mirroring weak US market data. Hong Kong's Hang Seng rose -1.1% and China's CSI 300 gained +0.2%, both supported by rebounding services activity and optimism for US-China trade talks.

 

Market Outlook: We expect the FBM KLCI to remain volatile and range-bound in the near term. While recent high-level US-China trade talks and an accepted invitation for Trump to meet Xi offer a more direct path to resolving issues, uncertainty will persist due to complex tariff and rare earth metal disputes. Investors should expect continued bargain hunting within a volatile trading range, with the index likely to consolidate above the 1,500 level as the market monitors progress in these negotiations and the upcoming release of US unemployment rate data.

 

Sector focus. For now, we advocate a cautious stance and favour defensive sectors, particularly in light of lingering trade uncertainties. We remain optimistic on power and ancillary sectors, along with blue-chip stocks, as both offer more stable and attractive entry points. Despite the recent rebound in technology counters, we advise reducing exposure to this sector given potential broader economic weakness signalled by recent data and its inherent sensitivity to volatility.

 

Technical Commentary: The FBM KLCI formed a hammer candle to snap a six-day losing streak. Indicators, however, remained negative with the MACD Line lingered below the Signal Line, while the RSI hovered below 50. A potential consolidation may take place as the key index attempts to find stability. Technically, the immediate resistance is located at 1,550, followed by 1,600. Support is envisaged around 1,500.

 

Company News (source: various)

Econpile Holdings Bhd secures RM43m piling job for Penang LRT project.

 

Cakaran Corporation Bhd’s unit suffers cyberattack, impact under assessment.

 

Paramount Corp Bhd’s CEO affirms that the Group will stay invested in Eco World International despite Malaysian pivot.

 

Huat Lai Resources Bhd to complete Malaysia’s largest cage-free chicken farm in 4Q.

Sentiment: Positive
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Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.210973 4.249411
EUR 4.954495 4.965490
CNY 0.589445 0.590817
HKD 0.536642 0.541158
SGD 3.306006 3.333319