KUALA LUMPUR: The FBM KLCI hovered near six-month lows as traders remained cautious over a potentially more hawkish US Federal Reserve and a spate of profit-taking in technology stocks.
At 9.20am, the benchmark index was up 1.24 points higher at 1,665.29, which constituted a meek rebound from the previous day's nearly 10-point fall.
Apex Securities said the market has made a bearish reversal signal following the FBM KLCI's break below the neckline of a double top pattern at the 1,665 level.
"Adding to the negative outlook, the break below key moving averages lends further weight to the bearish momentum.
"With the neckline support now compromised, further downside pressure is anticipated, potentially driving the index toward the next support zone in the 1,640–1,620 range," it said in its technical reading.
The research firm said the decline may also be reflecting broader market concerns surrounding the upcoming election cycle.
Given the political uncertainty, it said investors are likely to favour companies with resilient earnings visibility and strong balance sheets amid heightened market volatility.
Apex pegged the FBM KLCI's immediate technical resistance at the 1,675–1,680 level.
A sustained pullback in AI-related shares has brought the Nasdaq lower for four straight sessions, sending a trickle down effect to global markets, especially those weighted heavily in favour of semiconductor and AI-related plays.
However, Apex Securities said a stronger-than-expected earnings report and positive forecast from Micron reaffirmed resilient demand for AI infrastructure, which could continue to support sentiment towards semiconductor and tech-related counters.
The research firm added that investors are assessing the implications of the latest US inflation data on the US central bank's policy outlook.
"Although inflation came in line with market expectations, price pressures remain elevated, reinforcing expectations that the Fed will maintain a cautious stance on interest rates."
On Bursa Malaysia, tech stocks fell 1.43%, weighed down by the persistent selling pressure in US tech.
MPI dropped RM1 to RM48, Vitrox shed 17 sen to RM7.68, Unisem lost 11 sen to RM4.69 and Frontken dipped 10 sen to RM4.86.
The financial sector held steady, led higher by heavyweight banks including Maybank up six sen to RM10.78, Hong Leong Bank gaining two sen to RM21.72, CIMB rising two sen to RM7.41 and RHB adding five sen to RM8.21.
