The FTSE Bursa Malaysia KLCI is expected to remain under pressure in the near term as persistent foreign fund outflows, elevated oil prices and rising global bond yields continue to dampen investor sentiment, according to Hong Leong Investment Bank (HLIB).
In its latest market report, HLIB said the benchmark index fell 4.1 points to 1,672.3 on Thursday, extending its consolidation amid cautious trading across regional markets.
Profit-taking in selected heavyweights, including Press Metal, YTL Corp, YTL Power, Sunway Healthcare, 99 Speed Mart and Tenaga Nasional, weighed on the index.
Market breadth weakened to 0.64 from 0.95, while trading volume eased to 3.32 billion shares worth RM2.75 billion, below the five-day averages of 3.69 billion shares and RM3.32 billion.
Foreign institutions remained net sellers for a third consecutive day, recording outflows of RM109 million. This brought month-to-date foreign net selling to RM1.01 billion and year-to-date outflows to RM5.47 billion.
Local retailers and institutions provided some support, emerging as net buyers of RM92 million and RM17 million, respectively.
KLCI Support At 1,655 And 1,639
From a technical perspective, HLIB said the KLCI remains trapped within a descending channel, with the near-term bias staying negative.
The research house identified immediate support at 1,655 points, followed by 1,639 points.
A recovery above 1,685 and 1,704 would signal improving stability, with subsequent resistance at 1,716 and 1,731.
HLIB said the index could remain in a risk-off consolidation phase as investors await greater clarity on US-China trade developments and US-Iran negotiations, while elevated energy prices and bond yields continue to influence global markets.
Domestically, persistent foreign selling, potential second-half corporate earnings disappointments and household affordability concerns could further weigh on sentiment ahead of Budget 2027, scheduled for Oct 9.
