Asian markets jumped as easing Middle East tensions and falling oil prices lifted risk appetite, with investors shifting focus to the FOMC decision on 29 July and Wall Street’s mega-cap tech earnings. Brent crude fell below USD90/bbl on hopes of US-Iran de-escalation after Trump said Washington was in “good talks” with Tehran and a deal remained possible following two weeks of tit-for-tat attacks. Sentiment was further boosted by strong CATL 1H earnings and a robust CXMT debut, signalling demand for China’s semiconductor champions amid ongoing US chip restrictions.
Wall St (Dow: 0.51%, S&P 500: 0.02%, Nasdaq: -0.18%) closed mixed as investors weighed easing Middle East tensions and falling oil prices against renewed semiconductor concerns ahead of the Fed policy decision and a pivotal week of megacap tech earnings. Brent crude fell to USD86/bbl on hopes of US-Iran de-escalation, but gains faded after reports that China had advanced in developing domestic deep
ultraviolet (DUV) lithography machines, fuelling concerns over its semiconductor selfsufficiency drive and pressuring chipmakers. This week marks a key phase of the Q2 earnings season, with Microsoft and Meta reporting on Wednesday, followed by Amazon and Apple on Thursday. Other major results include Visa, Mastercard, Boeing, Exxon Mobil, Chevron, Qualcomm, Starbucks, Ford Motor and PayPal.
Mirroring regional gains, the KLCI surged 0.71% (+12.1 pts) to 1,713.1, driven by heavyweights including CIMB, PBBANK, MAYBANK, IOIPG, TENAGA and PETGAS. Market breadth improved to 0.97 from 0.47 previously, while trading activity eased, with volume declining to 2.87bn shares (5D avg: 3.22bn) valued at RM2.24bn (5D avg: RM2.42bn), as investors remained cautious amid lingering Middle East tensions and ahead of the Negeri Sembilan state polls on 1 Aug. Local retailers extended their net buying streak for a fourth consecutive session (+RM8m; 5D rolling: +RM244m; MTD: +RM48m; YTD: -RM0.75bn), while foreign institutions turned marginal buyers (+RM0.17m) after three straight days of net selling totalling RM286m (5D rolling: -RM117m; MTD: +RM288m; YTD: -RM2.49bn). In contrast, local institutions emerged as the largest net sellers (-RM8m; 5D rolling: -RM127m; MTD: – RM336m; YTD: +RM3.25bn).
After surging 80 pts (+4.8%) from the YTD low of 1,655 (29 June) to 1,736 (17 July), the KLCI entered a healthy profit-taking phase, slipping to 1,697 on 24 July before rebounding strongly to close at 1,713. The index appears to be forming a firm base above the key MA200 (1,685), with repeated rebounds from the support zone signalling accumulation and improving medium-term sentiment. While recovery has strengthened after reclaiming the MA20/50/100/200, a decisive breakout above the descending trendline near 1,730 is needed to resume the uptrend toward 1,750-1,771 (YTD high). Key supports are at 1,684 and 1,697.
HLIB sees that the KLCI’s recovery remains intact after building a potential base above the 200-day MA, but sentiment should remain cautious as investors navigate Wall Street volatility, Trump’s tariff threats, lingering Middle East tensions despite a temporary US-Iran truce, and Thursday’s FOMC meeting. Domestically, Johor BN’s landslide victory has revived GE16 speculation, while upcoming Negeri Sembilan polls and potential Melaka (Dec 2026) and Sarawak (Feb 2027) elections could raise political risk premiums and weigh
