Asian bourses traded mixed on Friday, with stronger-than-expected July exports lifting China, while Japan and South Korea weakened as semiconductor counters remained under pressure ahead of US NF payrolls for clues on the Fed’s Sep policy path. Meanwhile, Brent rose to ~USD83/bbl as investors awaited clarity on the reopening of the Strait of Hormuz (SOH) after Iran reviewed a draft bill restricting “hostile” vessels from transiting. Fresh Houthi attacks on Saudi vessels, troops and civilian targets further clouded the interim peace deal and heightened supply concerns.
Wall Street ended higher (S&P 500 +0.6%, Nasdaq +1.3%, Dow +0.3%) after unexpectedly weak nonfarm payrolls cooled Fed rate-hike expectations. NF payrolls fell 23k in July (vs. +85k expected), marking the first monthly contraction since February and prompting traders to cut the odds of a Sep Fed rate hike to 44% from 67% a week ago. Looking ahead, markets will focus on SOH negotiations for clues on energy prices, while the volatile AI trade awaits earnings from Applied Materials, Cisco and CoreWeave. US CPI, PPI, retail sales and Michigan Consumer Confidence will also be closely watched for further clues on the Fed’s next rate decision.
In line with mixed Wall Street and regional cues, the KLCI slipped as much as 7.8 pts before trimming the losses to 1.4 pts at 1,735.8, with 11 index constituents down vs 18 gainers, led by selloffs in MAYBANK, PBBANK, PMETAL, CDB, TENAGA
and MISC. Trading activity picked up, with volume at 3.56bn shares (5D avg: 3.24bn) worth RM3.47bn (5D avg: RM3.07bn), amid heavier foreign outflows. Foreign institutions remained major net sellers (-RM238m; 5D: -RM437m; MTD: -RM437m;
YTD: -RM2.92bn), while local institutions (+RM183m; 5D: +RM451m; MTD: +RM451m; YTD: +RM3.75bn) and retailers (+RM55m; 5D: -RM14m; MTD: -RM14m; YTD: -RM0.83bn) emerged as net buyers.
After rallying 95pts from 1,655 (YTD low on 29 June) to 1,750 (6 Aug), the KLCI fell 14pts to 1,735.8 on profit-taking, forming a bearish engulfing pattern. Nonetheless, the bullish trend remains intact, staying above the descending channel and holding above
key MAs. A decisive break above 1,750 would pave the way towards 1,763 (weekly upper BB) and 1,771 (YTD high). Conversely, a break below immediate supports at 1,727 (61.8% FR) and 1,721 (MA20) could expose downside towards 1,700.
In the near term, the KLCI may witness continued volatility 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 alignment.
