Asian markets rebounded last Friday, led by rallies in semiconductor stocks, as investors shrugged off renewed Middle East tensions and refocused on the resilient AI investment theme following Micron’s US$250bn U.S. investment pledge, Meta’s in-house AI chip push fresh capex commitments, coupled with SK Hynix’s overwhelming US$28bn share sale. Meanwhile, the SHCOMP slid 1% as investors took profits in technology and semiconductor stocks ahead of this week’s key June trade data and 2Q GDP release.
Wall Street brushed aside renewed US-Iran tensions after Trump issued fresh warnings to Tehran, with the Dow (+0.29%), S&P 500 (+0.42%) and Nasdaq (+0.29%) closing higher, supported by AI optimism and SK Hynix’s strong Nasdaq debut. Despite continued US-Iran strikes and disputes over the Strait of Hormuz, investors turned their attention to the 2Q26 earnings season, which begins this week with result from JPMorgan, Bank of America, Citigroup, Goldman Sachs, Wells Fargo, BlackRock, Johnson & Johnson, Morgan Stanley, UnitedHealth Group and Netflix. Consensus expects S&P 500 earnings to grow a robust 24% YoY in 2Q26. Markets will also closely watch Fed Chair Kevin Warsh’s congressional testimony for policy cues, alongside key U.S. economic data including June CPI, retail sales, consumer sentiment and housing activityMalaysia. KLCI rebounded 0.83% to 1,691.5, tracking gains on Wall Street and regional markets, as bargain hunting emerged in SUNWAY, PMETAL, IHH, IOICORP, CDB, SUNMED and PBBANK. Market breadth improved to 1.46 from 1.06, with trading activity strengthening to 2.85bn shares (5D avg: 2.76bn) worth RM2.25bn (5D avg: RM2.07bn).
In the local front, foreign investors extended net buying for a 3 rd session (+RM4m, 5-day rolling: RM76m, MTD: -RM188m, YTD -RM2.97bn) alongside local institutions (+RM27m, 5- day rolling: -202m, MTD: +RM66m, YTD +RM3.65b. In contrast, retailers emerged as the largest net sellers after four consecutive session of net buying at RM157m (- RM31m, 5-day rolling: +RM126m, MTD: +RM122m; YTD: -RM0.68bn).
Following last Friday’s long-awaited 13.8-pt rebound to 1,691.5, the FBM KLCI reclaimed the MA200 (1,679) and 1,684 (50% FR), while MACD and RSI continued to improve. Although the near-term bias has turned neutral-positive, a decisive breakout
above 1,705 (38.2% FR) is needed to confirm a trend reversal towards 1,714 (upperBB), 1,730 (23.6% FR) and 1,750. Otherwis ehe index may remain range-bound, with support at 1,679 and the YTD low of 1,655.
HLIB notes that volatility is likely to persist amid renewed Middle East tensions, the US earnings season kick-off and Warsh’s congressional testimony. Locally, BN’s Johor landslide has raised the prospect of an earlier GE16, while the upcoming Negeri Sembilan polls and potential Malacca polls (term expiring in Dec 2026) may further elevate political uncertainty. The higher risk premium could keep upside capped and prolong KLCI’s consolidation.
