Expect positive momentum from Wall Street into the local market

The FBM KLCI index fell 1.2%, mainly due to selling pressure in major banking stocks ahead of the US CPI data release. The energy sector was the worst performer, down 2.8%, while smaller stocks also closed negatively. Globally, Wall Street advanced with Nasdaq leading, buoyed by news of Nvidia potentially exporting advanced chips to Saudi Arabia. European markets were mixed due to the release of US inflation data, and Asian markets declined

Positive momentum

Looking ahead, there is expected positive momentum from Wall Street into the local market, with inflows of foreign funds. The US core CPI rose by 0.3%, slightly higher than expected, which may lead the Fed to opt for a smaller interest rate cut of 25 basis points. Investors are also watching the UK interest rate decision and US PPI data. The technology sector may benefit from the Nasdaq’s gains, and bargain hunting in the oil and gas sector could follow the rebound in crude oil prices, though gains may be limited by weak demand fundamentals.