FBM KLCI Gains Amid Broad Recovery. Waiting for Inflation Data

Kuala Lumpur, July 24, 2024 — The FBM KLCI posted a modest gain of 0.5% yesterday, recovering some of its previous session losses. This uplift was driven by a rebound in over half of the key index components. Lower liners also saw improvements, while most sectors closed in the green, with the Construction sector leading the pack with a notable 2.0% increase.

Market Outlook: Inflation Data

As anticipated, a mild recovery took precedence, spurred by bargain hunting activities. The key index is now just shy of the 1,630-point mark. “We expect a consolidation may take shape as investors turn cautious ahead of the release of Malaysia’s inflation rate data later today,” an analyst commented. The upcoming data release is expected to reflect the impact of the removal of the diesel blanket subsidy.

Lower liners may continue to build on the previous session’s recovery, but gains are expected to be choppy due to quick profit-taking activities. “Key focus remains on the US corporate earnings releases over the interim,” added the analyst.

Sector-wise, the oil and gas sector is anticipated to face continued weakness, with crude oil prices having declined for the past four consecutive sessions. Conversely, the Construction sector is expected to build on yesterday’s recovery, with the industry remaining robust.

Global Markets Review

Wall Street exhibited volatility, with the Dow Jones Industrial Average dipping 0.1% due to mixed earnings results from Alphabet and Tesla. Additionally, new home sales data for June 2024 showed a year-over-year decline of 5.4%, marking the steepest contraction since 2022. European stock markets ended the day mixed, while Asian stock markets closed mostly upbeat.

“We believe the market is navigating through a period of cautious optimism,” said a market strategist, summarizing the global market sentiment.

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