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KLCI advances further as ringgit firms and regional markets rally
Mon, 06-Jul-2026 07:27 am
by Research Team • Apex Research

Malaysian Market Review. The FBM KLCI extended its gains for a second straight session on Friday, climbing 17.22 points, or 1.04%, to close at 1,679.05 (from Thursday's 1,661.83), tracking a broad regional rally as easing US rate-hike expectations lifted investor sentiment. The index opened 3.90 points higher at 1,665.73 and traded between an intraday high of 1,682.62 and a low of 1,662.91. Market breadth improved markedly, with 658 advancers outpacing 380 decliners. Sector-wise, Financial Services led the charge, surging 205.73 points to 19,831.96 as banking heavyweights rallied on the softer US jobs print, followed by Plantation (+81.14 points to 8,969.54) on firmer CPO sentiment, Energy (+8.94 points to 758.60) and Industrial Products & Services (+2.99 points to 182.44).

Global Markets. There was no trading activity on Wall Street on Friday, as US markets were closed for the Independence Day holiday. In Europe, European STOXX Europe 600 rising 0.68% to 652.77. In Asia, sentiment turned sharply positive, led by a stunning reversal in South Korea's KOSPI, which surged 5.76% to 8,088.34 as its chipmakers rebounded, followed by Japan's Nikkei 225 (+1.47% to 69,744.07), and Hong Kong's Hang Seng Index (+1.28% to 23,350.03).

Market Outlook. The confirmation that US labour market momentum is cooling has materially reduced the odds of further Fed tightening, and the resulting relief has flowed through emerging market assets, with the ringgit strengthening 0.26% to 4.0700 against the dollar even as foreign funds remained net sellers on Bursa. The sharp overnight reversal in Korean and regional semiconductor names, a stark turnaround from the liquidation seen earlier in the week, suggests the Asian tech unwind may have been a short, sentiment-driven air-pocket rather than the start of a deeper de-rating, and should help restore risk appetite for Malaysia's own chip-linked proxies. That said, with US markets closed for the Independence Day long weekend and no fresh domestic catalysts on the immediate horizon, liquidity is likely to thin heading into this week, leaving the market vulnerable to headline-driven swings. Bank Negara Malaysia's this Monetary Policy Committee meeting on July 9 will be the key domestic catalyst to watch, with the OPR widely expected to be held at 2.75%. Beyond the OPR decision, the Johor state election on July 11 adds a further layer of domestic political risk that could weigh on sentiment in the coming week. On balance, we advise investors to stay cautious heading into the week ahead.

Sector focus. Technology and semiconductor-linked names should be back in focus after Friday's regional reversal, with KOSPI's 5.76% rebound suggesting the earlier sell-off in chip stocks was overdone; local proxies with genuine AI-related exposure across precision cleaning, advanced packaging and inspection/testing are best placed to capture any renewed re-rating, though counters still trading at stretched multiples remain vulnerable to another swing in sentiment. Banks continue to be the key swing factor for the index, with Friday's rally led by Financial Services (+205.73 points) underscoring how sensitive the sector, and by extension the broader KLCI, remains to shifting US rate expectations; a sustained dovish Fed repricing would be the clearest path to further index upside. Plantation counters extended their advance on firmer CPO price sentiment, while a firmer ringgit, if it sustains, bears watching for its potential drag on exporter margins across the technology and EMS space. Construction remains a newsflow-driven trade pending fresh contract announcements, and defensives should stay in favour for as long as regional volatility persists.

 

FBMKLCI Technical Outlook

Technical Commentary: Friday's rally extended the market's rebound, with the FBM KLCI gaining 17.22 points, or 1.04%, to close at 1,679.05, marking its highest close since mid-June while moving decisively above the 9-day EMA. The close above the Double Top neckline at 1,673 reinforces the near-term recovery and increases the likelihood of a retest of the 1,690 resistance level. A decisive breakout above 1,690 would invalidate the bearish Double Top formation and signal the potential resumption of the broader uptrend. Conversely, a pullback below 1,673 would weaken the recent bullish momentum and place this week's gains at risk.

 

Company News

UEM Sunrise Bhd has appointed EXSIM KLCC Sdn Bhd to develop its 1.6-acre freehold site in Kuala Lumpur into a mixed-use project comprising a hotel, hotel residences and a retail mall under a development rights agreement. (The Edge)

Nova MSC Bhd and Theta Edge Bhd have mutually agreed to end their more than two-year joint venture agreement. (The Edge)

Engineering and infrastructure services provider Rohas Tecnic Bhd said the Malaysian Anti-Corruption Commission (MACC) has concluded its investigation into its unit, HG Power Transmission Sdn Bhd (HGPT), with no further action to be taken against the company or its personnel. (The Edge)

Hextar Industries Bhd has bagged a RM138.42 million contract to provide engineering, procurement and construction works for an industrial development in Pulau Indah, Selangor. (The Edge)

Mesiniaga Bhd has secured a RM39.99 million contract from Pharmaniaga Logistics Sdn Bhd to provide new centralised server infrastructure for the Pharmacy Information System (PhIS) Version 3.0. (The Edge)

A joint venture (JV) led by Jati Tinggi Group Bhd has secured a RM27.5 million contract to undertake dam safety enhancement works at four hydroelectric facilities in Perak. (The Edge)

Radium Development Bhd managing director and major shareholder Gan Kah Siong’s brother, Tan Sri Gan Yu Chai, has emerged as a substantial shareholder of the property developer. (The Edge)

 

Sentiment: Positive
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