Asian markets slumped, led by Korea (-8.29%), Japan (-2.88%), Taiwan (-3.28%) and China (-1.70%), as a robust US jobs report dampened expectations for nearterm Fed rate cuts and pushed bond yields higher. The resulting risk-off move sparked heavy selling in technology and AI names, pressured by stretched valuations and profittaking after a prolonged rally. The pullback was further exacerbated by positioning unwinds ahead of the anticipated SpaceX listing, while escalating Iran–Israel airstrikes undermined fragile ceasefire hopes and lifted oil prices. Wall St ended mixed (Dow -0.16%, S&P 500 0.30%, Nasdaq 0.86%) as a rebound in semiconductor stocks and easing Iran–Israel tensions lifted sentiment, with Brent crude paring earlier gains.
On the corporate front, Marvell surged 9.6% following its inclusion into the S&P 500 and a strong outlook, while Apple slipped 1.9% after underwhelming announcements at its annual Worldwide Developers Conference. Focus now shifts to
May CPI/PPI and Michigan sentiment data, amid lingering US–Iran tensions and delays in reopening the Strait of Hormuz.
Locally, mirroring the weakness on Wall Street and across regional markets, the KLCI declined more moderately (-13.9 pts, -0.82% to 1,679.5) after a two-day rebound, with market breadth deteriorating to 0.37 (from 0.72). Losses were led by heavyweights including IHH, PBBANK, PMETAL, MAYBANK, HLBANK, YTL and YTLPOWR. Foreign funds remained persistent net sellers (-RM177m; 5-day: -RM2.85bn; June MTD: -RM1.22bn), extending their outflow streak to 17 consecutive sessions totalling RM5.01bn. In contrast, local institutions (+RM130m; 5-day: +RM2.50bn; June MTD: +RM904m) and retail investors (+RM47m; 5-day: +RM357m; June MTD: +RM320m) continued to provide market support
The KLCI remains in an extended corrective phase after forming a Double Top and breaking below key MAs (20/50/100/200-day), alongside its rising trendline (near 1,717). Immediate support lies at the MA200/1,668, with a decisive break could accelerate downside towards 1,650, 1,625 (38.2% FR) and 1,600. Conversely, only a firm reclaim above 1,700–1,717 would negate the downtrend and pave the way for a recovery towards 1,732 (10% FR) and 1,750.
Amid persistent Middle East tensions and risks surrounding the Strait of Hormuz, HLIB sees the KLCI remaining range-bound. Sentiment is pressured by the economic fallout from prolonged geopolitical tensions on Malaysia’s GDP and earnings, continued foreign fund outflows, and proposed U.S. tariffs (10%) tied to forced-labour concerns as Washington recalibrates its trade agenda.
Domestically, political risk premiums have inched higher despite the PM’s assurance against a near-term GE16. Preparations for potential snap polls in Johor and Negeri Sembilan have raised concerns over broader political stability, spillover risks to other
state polls, and persistent speculation of an early GE16 (due Feb 2028).
