Upsides on Bursa capped by negative global sentiment

KUALA LUMPUR: An extended rebound on Bursa Malaysia was capped on Thursday as investors priced down equities amid a more hawkish outlook on the global interest rate environment.

The benchmark FBM KLCI ended a four-day losing streak yesterday, supported by purchases from local institutions, but it was a brief reprieve from the mounting selling pressure as the outflow of foreign funds continued on Thursday.

At the opening bell, the blue-chip index lost 0.58 points to 1,539.84

The local market is expected to track sentiment in US markets, where the ongoing decline is reflective of the increasing risk-off environment as the first interest rate cut by the Federal Reserve is now likely pushed back to September. Overnight, the S&P 500 extended its losing streak for a fourth consecutive day by 0.58% to 5,022.21 while the technology-heavy Nasdaq dropped 1.15% to 15,683.37. The Dow Jones declined 0.12% to 37,753.31.

Apex Securities Research noted the cautious trading on the domestic market following yesterday's bargain-hunting and the decline in crude oil prices.

"Investors are advised to reduce trading activities and exercise caution while monitoring market sentiment during this volatile period. Focus should be on fundamentally sound stocks with undemanding valuation," it said in its market outlook.

By sector, the research firm said the oil and gas sector may experience some selling pressure due to the dip in oil prices, while the construction sector remains favoured for its ongoing multi-infrastructure projects.

It added also that export-related stocks may benefit from the stronger US dollar against a basket of currencies.

Stocks seeing early selling include PETRONAS Dagangan down 12 sen to RM21.68, Kuala Lumpur Kepong falling 12 sen to RM22.54 and Nestle shedding 10 sen to RM122.90.

Hibiscus Petroleum, seen as a proxy to oil and gas prices, slid five sen to RM2.67.

Meanwhile, top actives were Ingenieur up 0.5 sen to 15 sen, Jaks Resources losing 0.5 sen to 14 sen and Tanco falling 0.5 sen to 83.5 sen.

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