KUALA LUMPUR: Traders turned to profit-taking on Bursa Malaysia after the announcement of the US Federal Reserve's decision to stay put on the interest rate, as the absence of new catalysts opened a window of opportunity for cashing in on recent gains.
Overnight, the US central bank said it was maintaining the federal funds rate at 3.5-3.75%, pausing its rate-cutting cycle for the first time since July 2025. Most analysts are predicing the Fed could cut the interest rate by as many as two times this year, with the first being as early as in June.
The FBM KLCI was down 11.88 points to 1,753.31 as at 9.14am. Including the losses made in the previous sesion, the market lost about 1.5% since last Tuesday's close, which marked a high point in the recent rally.
Blue chips feeling the brunt of the selling included IHH down 11 sen ot RM8.91, Maybank dropping 14 sen to RM11.55 and PPB sliding 20 sen to RM11.20.
"The local benchmark index may extend its near-term correction, amid overbought technical conditions with profit-taking pressure intensifying following the recent rally," said TA Securities in its market outlok.
"Immediate support stays at the 1,700 psychological level, with stronger support coming from the September 2016 low (1,645), followed by the 76.4%FR (1,610). Immediate resistance is kept at the
138.2%FP (1,804), with next upside hurdle coming at the 150%FP (1,841), followed by tougher resistance at the 161.8%FP (1,879)."
Rakuten Trade said it views the correction as healthy given the strong run-up in prices since the start of the year. "Nonetheless, we hope that a rebound will not be procrastinated as this may erode the prevailing market vitality," it said in a note.
The research firm added it is widely expected that foreign funds exiting Indonesia due to a potential downgrade by MSCI may consider Malaysia as an alternative investment destination.
Among the most actively traded stocks, Velesto
was down 0.5 sen to 30 sen, ISF rose 2.5 sen to 50.5 sen and Niche Capital Emas gained one sen to 12.5 sen.
