Mirroring Wall Street’s mixed performance, Asian markets wavered amid renewed tech weakness, with SNDK (-8%) and WDC (-12%) after disappointing results and guidance. Investors remained cautious, balancing tech volatility against Middle East de-escalation hopes while awaiting US jobs data for clues on the Fed’s rate outlook. Brent hovered near USD80/bbl after Iran reached an agreement with Oman on a proposed Strait of Hormuz shipping route. However, a broader US-Iran deal remains elusive, with US-Iran offering little clarity on the ongoing negotiations.
Wall Street took a breather after recent rally (Dow -0.85%, S&P500 -0.18%, Nasdaq – 0.06%) as a rebound in oil prices revived concerns over inflation and a potential Fed rate hike in September, with the US 10Y Treasury yield climbed 7 bps to 4.68%. Brent surged over 3% to ~USD82/bbl as uncertainty over the reopening of the Strait of Hormuz resurfaced, with Iran reportedly considering tighter restrictions on vessel passage, while Houthi forces in Yemen claimed on Thursday to have launched attacks on Saudi troop positions, renewing geopolitical tensions across the region. Meanwhile, hawkish Fed signals further clouded the rate outlook, with markets pricing a 58% chance of a September hike.’
Malaysia. In line with weakness across Wall Street and regional markets, the KLCI fell 11pts (-0.63%) after a 35.7pt surge over six consecutive sessions. Only 7 index constituents gained versus 20 losers, led by selloffs in PMETAL, TENAGA, CDB, PBBANK, 99SMART, SUNWAY and PETGAS. Trading volume shrank to 3.24bn shares (5D avg: 3.15bn) worth RM2.91bn (5D avg: RM3.09bn).
On fund flows, foreign institutions emerged as major net sellers (-RM175m; 5D: – RM68m; MTD: -RM199m; YTD: -RM2.68bn). In contrast, local institutions (+RM151m; 5D: +RM307m; MTD: +RM268m; YTD: +RM3.57bn) and local retailers (+RM24m; 5D: -RM239m; MTD: -RM69m; YTD: -RM0.89bn) were major net buyers.
After rallying 95pts from the YTD low of 1,655 to 1,750, the KLCI fell 11pts to 1,737.2 on profit-taking, forming a bearish engulfing pattern. Nonetheless, the bullish trend remains intact after breaking above the short-term descending channel and holding above key MAs. A decisive break above 1,750 would pave the way towards 1,762 (weekly upper BB) and 1,771 (YTD high). Conversely, a break below 1,730 (23.6% FR) and 1,719 (MA20) could expose downside towards 1,700.
In tandem with mixed Wall Street cues overnight, HLIB noted that the KLCI may see mild profit-taking after its recent rally, as repeated false dawns surrounding US-Iran interim deals warrant caution while investors await greater clarity on 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 alignmen
