Asian markets were mostly lower on Thursday as profit-taking and renewed trade tensions weighed on investor sentiment. The Nikkei 225 led regional losses, sliding 1.35%, after reports emerged that Washington may tighten export curbs on U.S. software to China — a move that reignited concerns over escalating trade frictions between the world’s two largest economies.
The sell-off followed a weak session on Wall Street overnight, where sentiment was dampened by disappointing earnings and guidance from major firms including Tesla, Texas Instruments, and IBM.
However, U.S. markets later staged a strong rebound, with the Dow Jones Industrial Average (+0.31%), S&P 500 (+0.58%), and Nasdaq Composite (+0.89%) closing near record highs. Gains were led by Honeywell (+6.8%) and American Airlines (+5.6%), while energy stocks rose as oil prices spiked following new U.S. sanctions on Russia’s largest crude producers.
Investor confidence was also lifted by confirmation of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping, set to take place on October 30 in Seoul during the APEC Summit — a development that markets hope could ease bilateral trade tensions.
So far, more than 80% of S&P 500 companies have exceeded earnings expectations, reinforcing optimism about corporate resilience. Investors are now awaiting fresh U.S. inflation data ahead of the Federal Reserve’s 29–30 October policy meeting. After hours, Intel’s stock jumped 7.3% following strong quarterly results.
KLCI Climbs Ahead of ASEAN Summit
In Malaysia, the FTSE Bursa Malaysia KLCI (KLCI) rose 5.3 points to close at 1,608, buoyed by bargain-hunting in heavyweights such as CIMB, Telekom Malaysia, MISC, Press Metal, Sunway, and RHB Bank.
The uptick mirrored gains across ASEAN markets ahead of the ASEAN Summit, which begins in Kuala Lumpur on October 26–28, drawing world leaders and global attention.
Despite the advance, overall market sentiment remained cautious. Losers (589) outnumbered gainers (470), with total trading volume at 3.45 billion shares worth RM2.66 billion.
Foreign investors turned net buyers for the first time in 14 sessions, accumulating RM98 million worth of equities (October month-to-date: –RM1.88 billion; year-to-date: –RM18.30 billion). Local institutions and retailers, meanwhile, were net sellers, offloading RM50 million and RM48 million respectively.
Market Outlook: Range-Bound Ahead of Major Events
According to Hong Leong Investment Bank (HLIB), the KLCI is likely to trade range-bound in the near term as investors weigh several headwinds.
Nevertheless, HLIB maintains its end-2025 KLCI target of 1,660, premised on a 14.6x forward P/E and projected earnings growth of 3.9% in 2025 and 6.3% in 2026.
The bank remains constructive on Malaysia’s medium-term prospects, citing multiple positive catalysts.
HLIB recommends a multi-pronged investment strategy that includes buying high-beta stocks on dips, anchoring in resilient large caps, and focusing on domestic growth and catalyst-driven themes.
Top picks include: CIMB, Tenaga Nasional, IHH Healthcare, Gamuda, Sunway, AMMB, Dialog, IOI Properties, ITMAX, AEON, MCE Holdings, OSK, SMRT, and Focus Point.
HLIB expects buying momentum to resume, with immediate resistance levels at 1,618 and 1,640, while stronger resistance is seen at 1,659 (YTD high).
