KUALA LUMPUR: The rally on Bursa Malaysia is taking a breather as investors took stock of developments after a peace deal was signed between the US and Iran ahead of a formal ceremony this Friday.
Sentiment, however, is expected to remains positive given the expected end of the armed conflict, while the Strait of Hormuz reopened for business.
"The reopening of the Strait of Hormuz and lower oil prices should help ease inflation concerns and support global risk appetite," said Apex Securities in its market outlook.
Malaysia's benchmark FBM KLCI edged several points lower to 1,687.44 in the opening minutes of trading on mild profit-taking after the previous day's rally.
There was some decline in commodity and plantations stocks, including PETRONAS Chemicals falling nine sen to RM4.43, Press Metal
shedding seven sen to RM8.33 and SD Gurthrie falling six sen to RM5.95.
Apex Securities noted that investors remain wary over the US-Iran agreement and developments from the ongoing meeting of G7 nations.
Traders were also assessing the impact the disruption to oil supply has had on the global economy, with experts cautioning that it would take time before the oil supply situation normalises.
Meanwhile, all eyes are on the upcoming Federal Open Market Committee meeting taking place over the next two days, the first headed by newly appointed Fed Chair Kevin Warsh.
From a technical standpoint, the research firm said the FBM KLCI was not yet out of the woods despite the recent improvement in valuations.
"The FBM KLCI remains at a critical juncture, hovering around the neckline of a bearish Double Top formation. A decisive break below this level could signal further consolidation or downside risk in the weeks ahead.
"Should the KLCI decisively breach the 1,670-neckline support, the index may extend its decline towards 1,640. On the upside, resistance is expected around the 1,700 mark," it said.
