Asian bourses ended higher, mirroring Wall Street’s rally on Trump’s announcement that a US-Iran peace deal could be signed soon, triggering a retreat in oil prices following pledges to immediately reopen the Strait of Hormuz. Consequently,
risk appetite roared back, driving an aggressive recovery in beaten-down technology and chipmaking shares, ahead of the widely-watched SpaceX’s Nasdaq trading debut on 12 June to test broader market sentiment and evaluate current tech valuations.
Wall Street ended higher (Dow +0.70%, S&P 500 +0.50%, Nasdaq +0.31%) as sentiment was lifted by a robust debut from SpaceX (+19% to USD161), alongside growing optimism over a possible US–Iran peace agreement. Attention now shifts to
the upcoming FOMC meeting on 16-17 June, where rates are widely expected to remain unchanged. The key focus will be forward guidance under new Chair Kevin Warsh, particularly as policymakers navigate persistent inflation pressures and rising
political scrutiny.
On the local front, KLCI rose 0.24% to 1,683.6, extending its rally to a 3 rd session, led by banking, utilities and healthcare heavyweights in line with stronger global cues. However, participation softened, with breadth easing to 0.91 and volume down 12% to 2.91bn shares (RM2.33bn), as persistent foreign outflows and elevated political risk from GE16 speculation capped sentiment.Foreign funds remained dominant net sellers at -RM78m (5-day: -RM657m; MTD: – RM1.70bn), marking a 21st consecutive session of outflows totalling RM5.49bn. In contrast, local institutions (+RM25m; 5D rolling: +RM458m, MTD: +RM1.23bn) and retail investors (+RM53m; 5D rolling: +RM199m, MTD: +RM472m) emerged as key net buyers.
Building base near MA200: The KLCI remains in an extended corrective phase after forming a Double Top, breaking below key MAs (20/50/100-day) and its uptrend line (~1,720). Immediate support sits at 1,670 (200-day MA), with a decisive break could accelerate downside towards 1,650, 1,625 (38.2% FR) and 1,600. Upside remains capped unless the index reclaims 1,700–1,720 successfully, which would signal trend reversal and open the path towards 1,732 (10% FR) and 1,750.
HLIB noted that the KLCI is likely to trend higher this week following news that the US–Iran had reached a peace deal to reopen the Strait of Hormuz. However, upside may be capped near 1,720-1,730, pressured by lingering concerns over slower Malaysia GDP and earnings growth in 2H26, reflecting the lagged impact of the four-month US-Iran conflict.Political risk premiums are edging higher amid upcoming state polls in Johor (11 July) and Negeri Sembilan (1 Aug), alongside persistent speculation of an early GE16 (due Feb 2028), despite PMX’s repeated dismissal of calls for a snap election amid rising coalition tensions.
