FBM KLCI Edges Up 0.59% to 1,618 on Post-Budget Rally

KUALA LUMPUR – The FBM KLCI ended higher on Monday, rising 9.56 points, or 0.59%, to close at 1,618.01 from Friday’s close of 1,608.45, although weak market breadth suggested that the post-Budget rally is becoming increasingly selective.

Market breadth was negative despite the higher benchmark, with losers outnumbering gainers 778 to 344. Following the enthusiasm over Budget 2027, markets have cooled somewhat. While the Budget should continue to support fundamentals and market sentiment, elevated bond yields and geopolitical risks continue to limit the upside.

By sector, Finance (+0.92%) and Transportation & Logistics (+0.49%) led the gainers, while Healthcare (-2.40%), Consumer (-2.04%) and Utilities (-1.18%) were the main laggards.

Outlook: Cautious with slight positive bias

Looking ahead, the FBM KLCI is expected to trade cautiously with a slight positive bias. Continued optimism surrounding Budget 2027 and strength in selected index heavyweights provide support against a more challenging external backdrop.

However, Monday’s sharply negative market breadth despite the higher benchmark suggests underlying risk appetite remains weak. Elevated crude oil prices, rising global bond yields and renewed Middle East tensions should continue to cap valuations, particularly as expectations for further US monetary tightening remain in play. Budget 2027 should nevertheless provide a degree of domestic earnings visibility, particularly for sectors exposed to household spending and government development expenditure.

Sectors to watch: Post-Budget Rally

Consumer: Stocks may continue to attract buying interest from higher cash aid, tax cuts and one-off payments.
Banks: Could benefit mildly from loan growth, supported by RM57 billion in guarantee schemes and an additional RM5 billion BNM SME facility.
Property developers: May gain from stamp-duty relief for first homes priced up to RM750,000.

Technical view: 1,600 is key support

Technically, the FBM KLCI extended the pause in its downtrend, trading just above the psychological 1,600 level, which is now the key support. The index remains below all key moving averages, showing that the market remains weak. The growing gap between the current price and these averages also suggests there is still no clear sign of where the market may find support.

A decisive break below 1,600 could open the way towards 1,580, while any rebound is likely to face selling pressure. The outlook would improve only if the index reclaims the 1,625–1,650 range; until then, the bias remains bearish. (Apex, News)

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