KUALA LUMPUR: The FBM KLCI gapped down over 1% as the escalation of trade tensions between Washington and Beijing intensified over the weekend.
Asian market were pummeled on Monday after US President Donald Trump's Friday announcement it would impose 100% tariffs on China in retaliation for its curbs on exports of rare earth elements and equipment.
The global market meltdown began on Wall Street last Friday, with the S&P500 falling 2.71% and the Nasdaq plummeting 3.56%.
However, US futures have since rebounded, indicating investors remain hopeful the leaders of the world's two largest economies could still find a resolution to the trade impasse.
At 9am, the FBM KLCI was down 20.5 points, to 1,601.75, in line with a steep decline in regional markets.
Japan's Nikkei was down 1.71% to 28,880 while South Korea's Kospi shaved 1.17% to 3,568.
Malacca Securities expects the selling pressure to be a knee-jerk reaction to the negative US news.
However, it expects bargain-hunting to emerge given the "fairly positive" proposals in Budget 2026.
"The full implementation of e-invoicing in 2026, may
benefit Autocount Dotcom Bhd
, which started its breakout last Friday.
"Other budget-related beneficiaries include technology, utilities and RE sectors, underpinned by the government’s AI push, water projects and LSS6 programme. Besides, investors can also
look into the upcoming IPO for Insight Analytics Bhd, which is closing today," it said in a note.
Taking a more bearish stance, TA Securities said the Malaysian index is expected to extend its profit-taking consolidation phase as technical momentum and trend indicators continue to signal weakness in the local market.
"Last week's choppy and indecisive trading sessions
highlight the prevailing market hesitancy, with the benchmark index showing no strong directional bias.
"Nonetheless, sectors poised to benefit from measures announced in Budget 2026 may see increased buying interest, offering pockets of resilience amid broader market consolidation," it said in a market commentary.
It added also that the concerns over the ongoing US government shutdown could weigh on regional sentiment as heightened tensions between US policymakers suggest the political stalemate may persist.
