KLCI may extend gains; energy, power plays in focus as optimism builds ahead of Fed signals

The FBM KLCI rose 0.55% on Monday, supported by sustained buying in index heavyweights and firmer regional sentiment. Gains were led by construction stocks (+1.4%), while transportation and logistics (-0.8%) dragged. Broader market activity remained mixed, with lower-liners largely unchanged.

Regional markets were uneven. Japan’s Nikkei 225 jumped 0.77% to a record high on yen weakness, while Korea’s Kospi slid 1.5%. China’s Shanghai Composite gained 0.85%. On Wall Street, trading was muted — the S&P 500 (-0.1%) and Dow (-0.08%) edged lower, while the Nasdaq closed marginally higher (+0.03%) as investors awaited major retail earnings and Fed Chair Powell’s speech at Jackson Hole later this week.

KLCI gains

Near-term sentiment is improving, underpinned by firmer volumes and optimism over potential Ukraine peace talks, with President Zelenskyy and President Trump signaling openness to trilateral discussions with Russia.

Today’s Outlook: Local momentum is likely to extend, with selective strength in power ancillary and renewable energy plays tied to long-term catalysts such as data centre expansion and the energy transition. That said, investors may trade cautiously ahead of the Fed’s July meeting minutes (Wednesday) and Powell’s Jackson Hole address (Friday), which could shift policy expectations.

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