The FBM KLCI (+0.18%) extended its gains after hitting an intraday low of around 1,665, as Plantation and Industrial Products & Services heavyweights lifted sentiment on the index. Also, Malaysia again was being upgraded by another broker house, HSBC.
At the global front, the Wall Street ended mixed after wavering for most of the session, with a lack of fresh catalysts after last week’s 50bps rate cut by the Fed. Meanwhile, both the European and Asian stock markets also closed on a mixed tone as China’s latest stimulus failed to spillover towards regional markets.
The Day Ahead
The FBMKLCI edged higher, Malacca Securities in its review said while investors continued reducing exposure in small- cap stocks. With the ringgit strengthening, Malaysia’s position as an export-driven nation may face pressure. In the US, Wall Street ended mixed, breaking a 4-day rally as traders reassessed last week’s 50bps Fed rate cut and took profits amid a lack of new catalysts. Investors are now focused on upcoming economic data, where the non-farm payroll will be due next week. In commodities, Brent oil fell below USD74 due to positive developments in Libya. Gold prices surged toward USD2,660, while crude palm oil was traded positively towards RM4,100 following China’s stimulus announcements.
With the ringgit at RM4.12/USD, traders may reduce positions in export-related companies like Gloves and Technology in the short term. On the other hand, Consumer stocks are expected to benefit from a stronger ringgit. As we approach October, sectors like Construction, Building Materials, Property, and Utilities may present opportunities ahead of Budget 2025. Any mega project announcements, such as the KL-SG HSR and data center investments, could also boost these sectors.
