Ahead of the key US CPI print, Asian bourses mostly advanced, led by a sharp tech rebound as upbeat outlooks from CRWV and SMCI bolstered confidence in sustained AI infrastructure spending coupled with strong results from Tencent. Kospi
rallied 3.7%, with Samsung Electronics (+6.68%), SK Hynix (+5.54%) and LG Innotek (+10%) surging on reports of potential Temasek investments. However, gains remained cautious as Brent climbed towards USD89/bbl on fading hopes of a swift
Hormuz reopening. While Pakistan’s defence minister said Washington and Tehran were close to an “arrangement”, the lack of concrete progress and continued shipping attacks kept geopolitical risks elevated.
Wall Street ended mostly higher (Dow -0.04%, S&P 500 +0.26%, Nasdaq +0.54%), as a tame July CPI print and strong AI-related earnings lifted sentiment. Fed funds futures now price a ~60% chance of rates remaining unchanged at 3.50–3.75% in September, up from >45% a week ago. However, oil prices remained elevated on fading hopes of a swift Strait of Hormuz reopening continued to cloud the inflation outlook. After hours, CSCO fell over 4% on cautious gross margin outlook due to a heavier hardware mix from AI infrastructure shipments despite upbeat earnings.
Mirroring firmer regional markets, the KLCI rose 10.2 pts to 1,741.6 after falling 16.7 pts over four sessions, supported by expectations of stronger 2Q26 GDP growth (to be released on 14 Aug). Market breadth improved, with 661 gainers vs 512
losers, while 19 index constituents advanced against 8 decliners, led by buying interest in utilities and petrochemical stocks. Foreign institutions remained net sellers for a 5th straight session (-RM92m; 5D: -RM729m; MTD: -RM753m; YTD: -RM3.24bn),
followed by local retailers (-RM30m; 5D: +RM159m; MTD: +RM66m; YTD: – RM0.75bn). In contrast, local institutions (+RM122m; 5D: +RM570m; MTD: +RM687m; YTD: +RM3.99bn) emerged as major net buyers.
After rallying 95 pts from the YTD low of 1,655 (29 Jun) to 1,750 (6 Aug), the KLCI has been trending sideways, before rebounding to close at 1,741.6. The uptrend remains intact, with the index holding above the descending channel and key MAs. A decisive break above 1,750 would target 1,762 (weekly upper BB) and 1,771 (YTD high), while a break below 1,720 (downtrend line) could trigger a deeper pullback towards 1,700.
In the near term, the KLCI could remain range-bound as investors reassess positioning amid external and domestic uncertainties and a lack of fresh catalysts. Doubts over a swift US-Iran deal to reopen the Strait of Hormuz, alongside the upcoming August
results season and renewed foreign net outflows, are likely to keep sentiment cautious
Domestically, BN’s landslide Johor victory and strong BN-PN showing in the Negeri Sembilan polls have shifted focus to the DAP Conference on 16 Aug, where the party will decide whether to remain in the federal government, as well as 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 levels could pave the way for broader political alignment nationally.
