Market sentiment is volatile with Trump's tariffs

The FBM KLCI, Malaysia’s benchmark index, slipped 0.5% amid a regional downturn triggered by U.S. reciprocal tariffs, though it showed relative resilience compared to other ASEAN markets. Lower liners also weakened, but Healthcare (+2.0%) and Telecommunications & Media (+0.6%) sectors bucked the trend, with glovemakers rallying due to a favorable outlook against Chinese competitors. Globally, Wall Street saw sharp declines—its worst day since 2020—spooked by Trump’s tariffs, while European markets fell as EU leaders threatened retaliation if trade talks falter. Asian markets largely closed lower, rattled by the tariff escalation.

Volatile sentiments

Market sentiment has turned volatile, but Malaysia’s FBM KLCI is expected to hold the 1,500 level, supported by government efforts to negotiate with the U.S. for fair trade terms. Investors are eyeing upcoming U.S. unemployment data and Fed Chairman Jerome Powell’s speech for clues on economic direction. Amid uncertainty, defensive sectors like REITs, Healthcare, Utilities, and Transportation & Logistics are favored, while Oil & Gas is expected to lag due to OPEC+ increasing oil supply in May 2025. Technically, the FBM KLCI remains in a consolidation phase, with mixed indicators suggesting a trading range of 1,480-1,530, resistance at 1,550, and support at 1,500.

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