Asian markets surged on widespread bargain-hunting in battered semiconductor stocks, tracking Wall Street’s gains last Friday as soft US jobs data cooled September Fed rate-hike expectations. Sentiment was also boosted by Beijing’s pledge to accelerate infrastructure spending to support growth following another weak inflation reading. Meanwhile, Brent crude jumped to ~USD 87/bbl after Iran conditioned the reopening of the Strait of Hormuz on further US concessions, keeping energy-driven inflation risks front and centre.
Wall Street retreated (S&P 500 -0.06%, Nasdaq -0.32%, Dow -0.11%) and US10Y yield spiked 6 bps to 4.71% as a 5% oil surge revived inflation concerns and reduced expectations for Fed easing, with heavy Treasury supply and rising Japanese yields
adding to upward pressure, ahead of the key CPI data on 17 Aug. Chipmakers tumbled, with Nvidia down 2.9% amid concerns over the capital intensity and financing sustainability of the AI buildout. Nvidia is reportedly working with major Wall Street
firms on a USD500bn financing initiative to help customers fund AI infrastructure and purchases. Intel also fell 4.0% after announcing a USD15bn share offering to fund capex and working capital, sparking dilution concerns as it ramps up costly foundry
investments.
KLCI bucked Wall Street and regional gains, ending marginally lower (- 0.4pts) at 1,735.4 after trading within 1,730-1,739. Market breadth was slightly positive, with 707 gainers vs 447 losers whilst 15 index constituents were higher vs 12
decliners. Trading activity eased 2% to 3.49bn shares (5D avg: 3.40bn), valued at RM2.56bn (5D avg: RM3.11bn). Foreign institutions remained net sellers (-RM53m; 5D: -RM432m; MTD: -RM490m; YTD: -RM2.97bn), alongside retailers (-RM53m; 5D:
-RM70m; MTD: -RM67m; YTD: -RM0.89bn), while local institutions remained the key net buyers (+RM106m; 5D: +RM502m; MTD: +RM557m; YTD: +RM3.86bn).
After rallying 95pts from 1,655 (YTD low on 29 June) to 1,750 (6 Aug), the KLCI fell 15 pts to 1,735.4 on profit-taking, forming a combination of bearish engulfing and Doji candlestick patterns. Nonetheless, the bullish trend still 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 1,723 (MA20) could expose downside risk towards 1,700. In the near term, the KLCI may remain volatile following its recent rally, as doubts grow over a US-Iran deal to reopen the Strait of Hormuz, while investors await greater clarity from the upcoming August 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.
