The bearish marubozu candle

KUALA LUMPUR: Investor sentiment in Bursa Malaysia turned cautious this week as the FBM KLCI slipped 1.3% on Tuesday, dragged by broad profit-taking and regional weakness. Market breadth remained negative, with 629 decliners outpacing 413 gainers, while sector performance was largely subdued. Utilities (-1.3%), Finance (-1.2%) and Consumer (-1.1%) led losses, though Energy (+0.2%) bucked the trend.

Analysts noted that visibility on Malaysia’s policy direction has improved following the unveiling of the 13th Malaysia Plan last month, with further fiscal measures expected in the upcoming Budget 2026 in October. Still, near-term trading is expected to consolidate with a negative bias ahead of key US earnings and economic data releases.

“The strengthening ringgit, supported by broad dollar weakness, could weigh on export-driven sectors. This reinforces the case for investors to rotate towards defensive, domestic-oriented plays,” said one strategist.

Despite the short-term headwinds, selective opportunities remain. Construction, power ancillary and renewable energy counters continue to enjoy structural tailwinds, underpinned by data centre expansion and Malaysia’s ongoing energy transition. These themes are seen as resilient against global trade uncertainties.

marubozu candle

On the technical front, the FBM KLCI formed a bearish marubozu candle but managed to stay above its 50-day simple moving average (SMA50). Indicators remain constructive, with the MACD Line holding above the Signal Line and the RSI staying above 50. Immediate resistance is seen at 1,640, with support at 1,576.

Adding to market jitters, former US president Donald Trump’s recent move against Governor Cook has heightened concerns over the independence of US monetary policy. This development, coupled with global earnings cues, is expected to inject volatility into Malaysian equities.

Eyes are now on Nvidia’s earnings, due Wednesday after the US market close, seen as a key barometer of AI-driven growth and semiconductor demand. Friday’s release of the US Personal Consumption Expenditures (PCE) inflation print will also provide fresh insight into the Federal Reserve’s policy trajectory.

“Volatility remains elevated, but long-term investors can look beyond near-term swings to focus on structural growth stories,” said another analyst.

Business News