Bursa Malaysia ends higher on positive regional sentiment

Bursa Malaysia concluded at a higher level on Monday, mirroring gains experienced across major Asian markets due to a technology-driven rally on Wall Street the previous evening. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 1.60 points to 1,633.35, following its Monday close of 1,631.75. Throughout the trading day, the benchmark index fluctuated between 1,632.77 and 1,641.20.

Out of the total traded shares, gainers exceeded decliners with a count of 667 to 456. Out of the 551 unchanged counters, 1,108 shares remained untraded, while 13 were suspended. The trading volume declined to 4.18 billion units, valued at RM2.95 billion, compared to the previous day's 4.78 billion units, valued at RM2.89 billion.

Rakuten Trade Sdn Bhd's vice-president of equity research, Thong Pak Leng, attributed the index's upward movement to the US 10-year Treasury yield reaching 5.349 percent, the highest since 2002, and the 30-year yield briefly reaching 5.703 percent. On Monday, the S&P 500 gained 0.66 percent to 7,773.95 and the Nasdaq Composite rose 1.05 percent to 27,477.31.

The vice-president highlighted that domestic buying interest was evident in telecommunications and commodity-related stocks, while trading activity expanded to small-cap technology, energy, and plantation counters. He believes selected blue chips may continue to attract bargain hunters following last week's sharp correction. However, the absence of follow-through buying in the past three sessions indicates that investors remain cautious, with persistent foreign selling and elevated bond yields likely to impede the pace of recovery.

Easing crude oil prices and anticipations surrounding Budget 2027 are expected to provide some support to sentiment. The 2027 Budget will be presented on Friday, with strategic sectors including semiconductors, artificial intelligence, digitalization, energy transition, pharmaceuticals, logistics, and aerospace among the areas mentioned by the government.

For the remainder of the week, the benchmark index is anticipated to remain in a consolidation phase, offering mild recovery potential as oversold conditions provide some support against downside risks. However, a robust recovery may necessitate additional catalysts such as Budget 2027, foreign fund flows, bond yields, and geopolitical developments. The FBM KLCI trading range for the week is maintained at 1,620-1,650.