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Cautious Amid Geopolitical Risks
Mon, 10-Aug-2026 07:29 am
Apex Research

Malaysian Market Review. The FBM KLCI fell 0.08% to 1,735.75 on Friday, extending its pullback for a second straight session. Market breadth was positive, with advancers outpacing decliners 577 to 567, on turnover of about 3.56 billion units worth RM3.47 billion. Despite the two-session pullback, the benchmark still posted a weekly gain of 0.63%, rising 10.85 points from 1,724.90 a week earlier. By sector, Utilities (+1.76%) and Plantation (+0.81%) bucked the trend, while Telecommunications and Media (-0.92%) and Technology (-0.79%) led the laggards.

  

Global Markets: The Dow Jones added 0.28% to 54,036.93, marking a second straight week of gains, while the S&P 500 rose 0.62% to a record close of 7,757.64 on Friday, the Nasdaq climbed 1.3% to 26,690.62. The rally followed a surprisingly weak July jobs report, which showed a loss of 23,000 jobs against expectations of an 83,000 gain, leading traders to sharply scale back September rate hike expectations. Chip and software stocks led the gains, with Atlassian surging 35% and Airbnb up 17% on strong earnings, while oil prices edged higher as markets awaited a potential US-Iran deal to reopen the Strait of Hormuz. Meanwhile, Europe's STOXX 600 advanced 0.31% to close at 660.25, reflecting a broadly positive tone across the region. In Asia, with Japan's Nikkei 225 slipping 0.12% and South Korea's KOSPI declining 0.60%, while Hong Kong's Hang Seng bucked the softer regional trend to rise 0.54% (CNBC).

 

Market Outlook. The weak July jobs report has eased near-term Fed policy concerns, increasing the likelihood of rates being held steady in September and keeping overall risk appetite relatively constructive. The rebound in chip and software stocks also suggests that concerns over AI-related overcapacity may be stabilising, although a further deterioration in the labour market could increasingly raise concerns over economic growth rather than simply reinforce expectations for lower inflation. Meanwhile, escalating Iran-U.S. tensions over the Strait of Hormuz remain a key overhang, with Tehran denying direct talks despite Washington’s earlier claims that a deal was nearing. The weekend drone strike on Saudi Aramco’s Jazan refinery by Iran-backed Houthis further highlights regional supply risks. With the 60-day window for the U.S.-Iran interim deal set to expire within days and key demands still unresolved, volatility in oil and risk assets is likely to remain elevated. Against this backdrop, we expect the KLCI to maintain a cautious-to-negative bias, with heightened geopolitical uncertainty likely to weigh on regional risk appetite, particularly across import-reliant and transport-linked sectors facing potential cost pressures. 

 

Sector focus. Utilities and Plantation counters may extend their gains, supported by continued defensive rotation and firm CPO prices respectively. Telecommunications & Media and Technology could remain under pressure following Friday's weak showing, with sentiment in chip and telco-linked names still fragile after the recent pullback.

 

Technical Commentary: Since peaking in January, the FBM KLCI has remained within a downward-sloping channel. While the index rebounded strongly from its 1 July low, the rally stalled near the channel's upper resistance. Thursday's pullback also formed a Dark Cloud Cover candlestick, signalling renewed bearish pressure. We therefore expect the index to trade weaker in the week ahead. 1,735 is the immediate support, followed by 1,700 should profit-taking emerge. Meanwhile, the 1,760–1,770 resistance zone is the stiff resistance. 

 

Company News 

Stratus Global Holdings Bhd saw its shares rise as high as RM2.99, a 30% increase from Thursday, as investors ride expectations on strong earnings from AI-linked stocks. (The Edge)

 

Paradigm Real Estate Investment Trust saw its net property income rise by more than four times to RM40.36 million in its 2QFY2026 from R9.26 million. (The Edge)

 

Nuenergy Holdings Bhd secured a RM44.5 million contract with a China-based construction and engineering company to undertake mechanical, electrical and plumbing works for a Johor data centre landing station, the company’s largest high-voltage project yet. (The Edge)

 

LYC Healthcare Bhd shares will be suspended from Monday, Aug 10, due to the company not being able to submit its overdue annual report for the financial year ended March 31, 2026. (The Edge)

 

EXSIM Hospitality Bhd secured an 80/20 revenue-sharing scheme for 395 serviced apartment units at The Stallionz @ Ipoh White Times Square. Under this scheme, EXSIM will gain 20% of the net rental revenue with the unit owner. (The Edge)

 

Avaland Bhd celebrated its Amika Residences projects selling all of its units ahead of its construction schedule. (The Edge)

Sentiment: Neutral
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