KUALA LUMPUR: The sentiment on Bursa Malaysia soured as the US and Iran failed to reach an agreement over the weekend, while US President Donald Trump has ordered a blockade of all ships in the Strait of Hormuz that has paid a toll to Iran.
The FBM KLCI dropped 8.88 points to 1,682.43, as anxieties peaked over whether there will be any further attempt at finding a resolution to the Middle East conflict before the ceasefire expires on April 22.
Across Asia,stock markets turned lower with Japan's Nikkei falling 0.66% to 56,545 and South Korea's Kospi sliding 0.85% to 5,809. Japan's 10-year benchmark government bond hit a 29-year high after rising 5.5 basis points to 2.49%.
"Against this backdrop, the Malaysian market is expected to remain cautious, with energy-linked and upstream oil and gas stocks likely finding support on rising crude prices, while export-oriented, transportation and rate-sensitive sectors may face renewed pressure from escalating supply disruptions and elevated input costs," said Apex Research in its morning note.
On the technical charts, the research firm expects selling pressure on the FBM KLCI to persist after it failed to hold above the uptrend line.
"Immediate downside risk shifts to the next support at 1,665, with a break below this level reinforcing bearish momentum and signalling sustained near-term weakness."
Apex remains bullish on the energy sector, which is anticipated to benefit from the breakdown in talks and Trump's blockade order. Upstream oil and gas players are set to benefit from rising crude prices and plantation stocks, from firmer vegetable oil prices.
It said shipping and logistics names face heightened uncertainty given the Strait of Hormuz closure, while defensive sectors including utilities, telecommunications and healthcare offer relative stability amid rapidly shifting geopolitical headlines.
On cue, PETRONAS Chemicals climbed 22 sen to RM6.04. Other energy counters were also on the rise, including Hengyuan jumping six sen to RM1.25, Dialog rising seven sen to RM2.26 and Hibiscus Petroleum climbing 10 sen to RM2.19.
The heavyweight banks fell in anticipation of the negative impact to economic prospects; Maybank shed six sen to RM11.10, CIMB dropped five sen to RM7.47 and RHB declined seven sen to RM8.08.
Meanwhile, Top Glove was among the most active shares in early trade, rising one sen to 81.5 sen.
