Technology sector may face profit-taking

Market conditions are expected to remain volatile due to ongoing tariff concerns and trade tensions. The local stock market is likely to consolidate, impacted by foreign fund outflows and global economic uncertainties. However, opportunities may exist in data centre-related stocks like SCGBHD and UUE, which have strong fundamentals despite recent price drops.

On the macroeconomic front, Japan’s inflation data (released today) will shed light on the Bank of Japan’s interest rate plans, while Malaysia’s inflation data is a key local focus. Next week, attention will shift to US and EU PMI data and the US core PCE, the Federal Reserve’s key inflation measure.

Technology sector

Sector preferences lean toward defensive industries such as REITs, Healthcare (excluding gloves), and Utilities for stability, while the Technology sector may face profit-taking after Nasdaq’s recent decline.

From a technical perspective, the FBM KLCI index displayed a bearish engulfing candle, wiping out intraday gains as it nears the 1,500 level. Negative indicators persist, with the MACD below the Signal Line and RSI below 50. Resistance is at 1,570, with support around 1,500.

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