Amid negative market breath local resilience supports KLCI

KUALA LUMPUR, Aug 21 — The FBM KLCI ended 5.39 points, or 0.31%, higher at 1,736.71 on Thursday, despite negative market breadth as investors remained selective amid persistent global macroeconomic and geopolitical uncertainties.

A total of 610 counters fell against 577 gainers, while 610 counters were unchanged. Construction led sectoral gains, rising 1.24%, followed by Utilities at 0.53% and Plantations at 0.51%. Industrial Products fell 1.06%, while REITs and Energy declined 0.33% and 0.30%, respectively.

The softer yield environment provided some relief for growth-oriented stocks, although investors continued to favour selective counters with stronger earnings visibility and defensive characteristics.

negative market breath

Overnight, US equities weakened, with the S&P 500 falling 0.87%, Nasdaq Composite declining 1% and the Dow Jones Industrial Average losing 1.32%. Higher bond yields weighed on risk appetite, while crude oil prices above US$90 a barrel renewed concerns over inflation and consumer resilience.

US initial jobless claims fell by 6,000 to 206,000 for the week ended Aug 15, below the Reuters consensus of 210,000. The data suggests employers remain reluctant to cut jobs despite softer economic and hiring conditions.

European equities were also subdued, with the STOXX 600 slipping 0.12% for its seventh consecutive decline as higher oil prices revived inflation concerns.

Asian markets, however, were firmer. The KOSPI surged 5.89%, while the Nikkei 225 and Jakarta Composite Index rose 1.36% and 1.68%, respectively.

The FBM KLCI is expected to maintain a cautiously positive bias, supported by resilient domestic fundamentals but constrained by elevated global yields, energy prices and geopolitical risks.

Construction and Utilities could remain supported by infrastructure and data-centre spending, while Plantations may benefit from firm commodity prices. REITs remain vulnerable to higher yields, while Energy counters face mixed signals from stronger oil prices and geopolitical uncertainty.

Technically, the index has regained momentum after moving above its nine- and 20-day moving averages and holding above 1,720. However, the broader downward channel remains intact, with 1,750–1,760 acting as key resistance. A break above 1,760 would strengthen the recovery case, while a failure to hold 1,720 could expose the index to 1,700 and subsequently 1,680.

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