KUALA LUMPUR: Investors have their eyes trained on interest rates this week as the US Federal Reserve is due to decide on interest rates even as renewed strikes in the Middle East keep oil prices elevated.
Malaysia's main stock index was 2.61 points lower to 1,608.3 at 9.05am, as the equities prices pulled back after a four-day rebound.
Plantations and bank shares fell as traders took profit after the recent price recovery. Kuala Lumpur Kepong dropped 36 sen to RM20.16, SD Guthrie slid one sen to RM5.74, Maybank shed six sen to RM10 and Public Bank slipped one sen to RM4.74.
"Geopolitics remains the dominant swing factor heading into the new week, with Iran’s warning of renewed strikes and reports of a possible US-Israel response keeping Brent above US$114 a barrel and weighing on risk appetite across Wall Street and Europe on Friday," said Apex Securities.
"The Federal Reserve’s rate decision on Wednesday is the week’s key catalyst, with markets watching for any shift in tone after the 10-year Treasury yield pushed back toward 5%."
The research firm said it expects the FBM KLCI to trade cautiously into the news week, with elevated oil prices offering some support to energy and plantation-linked counters even as the broader risk tone stays fragile.
Separately, TA Securities said it expects the FBM KLCI to hold above the 1,600 level unless hotter-than-expected US inflation data triggers renewed pressure in global bond markets.
It said Malaysia's resilient economic growth, a relatively firm ringgit, elevated crude oil prices, and the prospect of future index expansion should provide an underlying cushion for Bursa Malaysia.
"However, a meaningful return of foreign fund flows is unlikely until US Treasury yields stabilise and show signs of peaking.
"In the meantime, investors should remain defensively positioned while using sharp, externally driven market pullbacks as opportunities to accumulate quality Malaysian
stocks with strong earnings visibility and balance-sheet strength ahead of 2027," it added in its weekly strategy note.
Early actives on Bursa Malaysia included Zetrix AI down 0.5 sen to seven sen, Ni Hsin
falling 1.5 sen to 47.5 sen and Axteria up five sen to 19 sen.
