The FBMKLCI (-0.43%) slid after Industrial Products & Services and Utilities heavyweights weighed on sentiment in the local market; the latter’s decline was due to analysts’ conservative stance on PCHEM (-40.0 sen), which likely spurred selling pressure in the sector.
On the global front, Wall Street extended its losses ahead of the Technology heavyweights’ reporting season, compounded by worse-than-expected Services PMI data, and Walmart’s conservative outlook. Meanwhile, both the European and ASEAN markets closed lower.
Looking ahead, the local bourse began the week on a negative note as Microsoft’s statement on softer data center capex spooked the market and dampened sentiment across the local data center themes. Also, Wall Street ended mostly lower ahead of Nvidia’s earnings report, coupled with softer economic data pointing to weakened consumer demand. Malacca Securities expects Wall Street to trade in a volatile manner as Hong Kong futures are down, while cryptocurrency like Bitcoin has turned weaker at the time of writing.
This week, traders will monitor (i) US Consumer Confidence, (ii) Prelim GDP QoQ, (iii) Unemployment Claims, and (iv) the Monthly Core PCE Price Index. In the commodities market, Brent Crude traded around USD74 per barrel. Meanwhile, Gold surged towards the USD2,950 level, while CPO hovered around RM4,500.
As for sector focus, Malacca Securities sees opportunities to accumulate in the Construction and Retail sectors, given their oversold conditions, a solid outlook, and steady earnings reports from 99 Speedmart. Despite recent sell-offs, the house believes traders may look out for bargain-hunting activities as Microsoft’s core strategy remains intact for its data center strategy and their 10-year outlook for cloud and AI. The house also opines that selected Healthcare and Technology stocks like KPJ and ITMAX will be decent for long-term investment.