Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said key regional indices closed lower as geopolitical tensions escalated following reports that the US was preparing for a potential military action against Iran.
At the same time, the US Federal Reserve (Fed) warned that the ongoing trade war led by president Donald Trump may fuel inflation and hinder US economic expansion.
Market participants closely monitored the Fed’s latest meeting on Tuesday and Wednesday, as policymakers evaluated interest rates amid the president’s tariff initiative.
“On the domestic front, we maintain a vigilant stance in response to escalating global volatility and uncertainties,” he told Bernama.
On the other hand, Thong said the benchmark index is near its 1,500 psychological support level and should this level be broken, the next support level will be 1,485 points, followed by 1,470 points.
At current valuation, he said the FTSE Bursa Malaysia KLCI (FBM KLCI) is trading at around 12 times the calendar year 2025 price-to-earnings ratio, which is way below its long-term average of more than 16 times.
“We advise investors to focus on blue-chip stocks with strong fundamentals that offer high dividends, such as those in the banking, telecommunications, and utilities sectors.
“We anticipate the FBM KLCI to trend within the 1,500-1,510 range towards the weekend,” said Thong.
Meanwhile, UOB Kay Hian Wealth Advisors Sdn Bhd’s head of investment research Sedek Jantan said the FBM KLCI closed lower sans catalysts, causing market participants to remain edgy and uncertain.
From January to May, he said fragile macroeconomic conditions and volatile markets were driven by fluctuating tariffs, Trump’s tax bill, and Middle East tensions.
“Policy uncertainty, sticky inflation and questions about the Fed’s independence further fuelled concerns.
“For Bursa, while foreign participation has been trending downward, it has not yet reached the lows seen in mid-April,” he added.
At 5pm, the FBM KLCI was 0.69%, or 10.51 points lower, at 1,501.44 from yesterday’s close of 1,511.95.
The benchmark index opened 0.99 of-a-point higher at 1,512.94, its highest for the day, and thereafter languished throughout the session to hit a low of 1,501.38 just before closing.
Market breadth was subdued, with 660 decliners outnumbering 298 gainers. Another 460 counters were unchanged, 1,005 were untraded and 11 were suspended.
Turnover expanded to 2.81 billion units valued at RM1.69 billion compared with yesterday’s 2.42 billion units worth RM1.79 billion.
Among the heavyweights, Maybank shed 2 sen to RM9.60, Tenaga Nasional and IHH Healthcare remained unchanged at RM14.22 and RM6.85 respectively, Public Bank slipped 5 sen to RM4.19, and CIMB declined 7 sen to RM6.58.
For the most active stocks, PUC shed 1 sen to 2 sen, Tanco declined 2.5 sen to 95.5 sen, MyEG eased 2.5 sen to 90.5 sen, SNS Network Technology perked up 1 sen to 54.5 sen, and Borneo Oil was flat at 1 sen.
On the index board, the FBM Emas Index fell 78.06 points to 11,223.74, the FBMT 100 Index lost 76.09 points to 11,004.01, and the FBM Emas Shariah Index tumbled 77.45 points to 11,232.89.
The FBM 70 Index slumped 107.34 points to 16,093.45 and the FBM ACE Index was 26.29 points lower at 4,415.05.
By sectors, the plantation index trimmed 19.43 points to 7,218.61 and the energy index decreased by 0.96 of-a-point to 739.65.
The financial services index shrank 91.28 points to 17,330.14 and the industrial products and services index edged down 1.82 points to 148.24.
The Main Market volume increased to 1.13 billion units worth RM1.45 billion from 1.06 billion units valued at RM1.55 billion registered at yesterday’s close.
Warrants turnover expanded to 1.38 billion units valued at RM164.26 million, versus 1.16 billion units worth RM180.99 million previously.
The ACE Market volume advanced to 294.93 million units valued at RM81.53 million against 194 million units valued at RM60.65 million yesterday.
Consumer products and services counters accounted for 208.57 million shares traded on the Main Market, industrial products and services (180.37 million), construction (89.58 million), technology (144.96 million), SPAC (nil), financial services (55.48 million), property (155.34 million), plantation (15.85 million), REITs (26.18 million), closed end fund (8,000), energy (130.36 million), healthcare (51.27 million), telecommunications and media (21.23 million), transportation and logistics (23.23 million), utilities (36.46 million) and business trusts (18,900).