KUALA LUMPUR: Consolidation pressures are keeping the FBM KLCI on a sideways trajectory, although the downside bias is intensifying amid fears of a September rout on the US stock market.
The Wall Street indices opened the first day of September - historically a bad month for US stocks - trading on the backfoot following a US Court of Appeals ruling that Trump's tariffs were illegal, sparking uncertainty over the country's economic outlook.
The FBM KLCI opened on Wednesday 1.47 points lower at 1,575.23 amid the heightened caution, although any walk back in the tariffs could alleviate the impact on exports.
According to TA Securities, the Malaysian market is expected to extend its consolidation phase as investors adopt a wait-and-see approach ahead of Bank Negara's overnight policy rate decision and crucial US employment data due later this week.
"Immediate support stays at the 50%FR (1,527) with stronger supports seen at the 38.2%FR (1,490) and the 23.6%FR (1,444). Immediate resistance is maintained at 1,610, the 76.4%FR, with next upside hurdle at the December 2024 high of 1,644, followed by stronger resistance at 1,684," it said in a market commentary.
Malacca Securities said the local market could turn defensive following the negative overnight performance in the US.
It said traders could focus on defensive sectors like banks, REITs and consumer, with some of the top picks including AmBank, IGB REIT and 99 Speed Mart.
"Meanwhile, traders can monitor solar-related counters such as Perkat and Northern Solar, which are currently in an uptrend underpinned by government initiatives like NETR, NEM, and LSS projects.
"Lastly, investors may also consider the upcoming IPO, Express Powerr Solutions Bhd," it said in a note.
Among the actively traded stocks, TWL shed 0.5 sen to 2.5 sen, Magma rose 0.5 sen to 31.5 sen and Oppstar jumped eight sen to 56 sen.
There was also buying interest in consumer shares, including Heineken adding 46 sen to RM21.08, F&N rising 38 sen to RM27.50 and Carlsberg gaining 16 sen to RM16.46.
