Mirroring Wall Street’s extended rally, Asian markets jumped as easing oil prices, lower bond yields and strong US earnings drove a tech rebound, overshadowing slides in AMD and SpaceX on weaker guidance and concerns over rising AI capex and funding needs. Oil extended its decline on optimism over a possible US-Iran deal to reopen the Strait of Hormuz, with Brent slipping to around US$79/bbl, well below its US$126 peak since the US-Iran war erupted on 28 Feb.
The Dow surged as much as 659 pts to a record 54,744 before paring gains to 54,349 (263 pts/0.49%), while the S&P 500 (-0.17%) and Nasdaq (-0.83%) retreated as tech stocks weakened. On the earnings front, AMGN (+4.57%), DIS (+3.66%) and LLY (+4.76%) advanced on strong results and guidance, while NVDA (+3%) rose after SpaceX said it would exclusively use Nvidia processors for future AI infrastructure. On the macro front, US private payroll growth slowed in July, while ISM services PMI edged up to 54.1 from 54.0, below expectations. Markets now price a 54.9% chance of a September Fed rate hike, down from 58.3% a week ago.
In sync with bullish Wall Street and regional markets, the KLCI soared 15.5 pts to 1,748.2 for its 6th straight gain, with 22 gainers vs 6 losers among index constituents, led by YTLPOWR, PMETAL, CDB, GAMUDA, TENAGA, SDG and YTL. Trading volume surged to 3.89bn shares (5D avg: 3.0bn) worth RM3.80bn (5D avg: RM2.96bn). Foreign institutions resumed net buying (+RM54m; 5D: +RM184m; MTD: -RM24m;
YTD: -RM2.51bn), alongside local institutions (+RM115m; 5D: +RM80m; MTD: +RM117m; YTD: +RM3.42bn). Conversely, local retailers emerged as major net sellers (-RM169m; 5D: -RM264m; MTD: -RM93m; YTD: -RM0.91bn).
After rallying 93 pts from the YTD low to 1,748.2 yesterday, the KLCI broke strongly above the descending channel, signalling a bullish trend reversal after weeks of consolidation. A decisive breakout above 1,750 should pave the way towards 1,762 (weekly upper BB) and 1,771 (YTD high). However, momentum is becoming overbought, suggesting potential healthy profit-taking, with key supports are at 1,730
(23.6% FR), 1,716 (MA20) and 1,705 (38.2% FR). 5 (38.2% FR).
In tandem with mixed Wall Street cues overnight, HLIB said the KLCI may see mild profit-taking after its recent rally as investors await greater clarity on the US-Iran interim deal to reopen the Strait of Hormuz and the upcoming Aug results season. Domestically, BN’s landslide Johor victory and strong BN-PN showing in the Negeri Sembilan polls have shifted focus to potential Melaka (term due Dec 2026) and Sarawak (Feb 2027) elections. Attention will also turn to the timing of GE16 (term due Dec 2027) and whether closer BN-PN cooperation at the state level could pave the way for broader national political alignment
