FBM KLCI sees mild pull back as upbeat sentiment takes a breather

KUALA LUMPUR: The FBM KLCI opened lower on Tuesday as the positive momentum on the domestic market took a breather following a solid 1Q rally.

At 9am, the key index was down 0.49 points to 1,543.53, with mild profit-taking on the previous day's gains.

In a note, Apex Securities Research suggested that a pull back on the FBM KLCI would be cushioned by the World Bank's latest report that maintained Malaysia gross domestic product growth at 4.3% year-on-year in 2024.

In the April 2024 East Asia and Pacific Economic Update, East Asia and Pacific chief economist Aaditya Mattoo said domestic demand will continue to anchor growth, and Malaysia is also set to benefit from the recovery in the export market.

He noted that the slowing growth in China would have negative spillover effect on Malaysia, given the latter's exposure to the world's second largest economy.

"But in general, Malaysia is going to benefit from what is referred to as the technology cycle, which boosts electrical and electronics exports; and it is already benefiting from the significant relocation of semiconductor production from China,” he said.

Meanwhile, Apex Securities said the lower liners are also bracing for more upsides, supported largely by the positive market sentiment.

"We continue to favour the oil and gas sector, premised on the stability in crude oil prices that is inching higher for the third straight session.

"The open tender for LSS5 programme is expected to boost trading interest within solar-related players," it said.

On the domestic market, PETRONAS Chemicals shaved four sen to RM6.71, Maxis fell three sen to RM3.39 and Kuala Lumpur Kepong dropped 18 sen to RM22.40.

Bucking the trend, YTL Power jumped seven sen to RM3.98 while MISC climbed 22 sen to RM7.88.

Consumer counters on the rise included Dutch Lady gaining 78 sen to RM33.28 and F&N adding 18 sen to RM29.56.

Of actives, Ahmad Zaki Resources rose 2.5 sen to 24.5 sen, Alpha added one sen to 33.5 sen and Widad lost 0.5 sen to eight sen.