The FBM KLCI snapped its 8-day losing streak and bounced higher, outperforming the mixed broader market. Given the mixed trading activities on Wall Street, we believe sentiment on the local front may remain tepid ahead of the interest rate decision by the US Fed in the upcoming FOMC meeting. On a side note, the recent South Korea strike could further impact the global supply chain of chip productions.

The FBM KLCI plunged below its 52-week low in tandem with regional peers, shaken by worries that the hot inflation will drag the economy into recession; We have seen net foreign selling continued to increase (5-day cumulative net foreign selling: RM600.1m). Given the significant selloff overnight on Wall Street, we believe there might be another selling wave prior to the US FOMC meeting, eventually impacting the local bourse negatively for the session.

The FBM KLCI posted steep losses last Friday amid regional pullback except for China stock markets; net foreign selling in the past 5 sessions stood at RM446.2m. Global stock market undertone could remain negative as the blistering inflation in the US may fan investors’ worries on further interest rate hikes and more quantitative tightening going forward. We believe the global weakness will spill over to the local front with limited bargain hunting activities as investors trade cautiously ahead of US Fed’s and UK Bank of England’s interest rate decision this week.

The FBM KLCI slumped for the sixth straight session amid regional weakness, marking its longest losing streak since January 2022. Despite the stronger retail sales recorded in April 2022 coupled with the improved unemployment rate which dipped below 4.0%, investors may stay cautious given the heavy selling pressure on Wall Street and European stock exchanges as ECB increased its interest rate by 50 bps, translating to further volatility on local exchange over the near term.

The FBM KLCI lost ground in the final-hour selloff as investors struggled to find a floor amid concerns over elevated inflation and costs pressure. Given the slight negative tone on Wall Street, technology stocks will be under pressured once again. Meanwhile, the elevated Brent crude oil price trading above USD123, coupled with the trucker strike in South Korea could further threaten the global supply chain disruptions and add risks to the global inflation. Having said that, we believe there will be positive trading activities within the recovery-themed sectors as we are transitioning to the endemic phase.

The FBM KLCI remained negative as investors continued to trade cautiously under the interest rate upcycle as well as intensifying inflationary pressure environment. We expect a range-bound trading on the local bourse prior to a series of economic data releases for the week including Malaysia’s unemployment rate, European Central Bank interest rate decision, as well as inflation data from China and US. Nevertheless, the overnight jump on Wall Street may shed a light on the local bourse, especially in the technology sector.

The FBM KLCI slid for the third straight session as investors took further profits in the banking heavyweights, while picking up shares in technology and energy sectors. We believe the local bourse is poised for a mild turnaround supported by bargain hunting activities especially in commodity and technology stocks given the flat overnight Wall Street movements. Nevertheless, downside risks include global inflation and the prolong Russia-Ukraine conflicts.

The FBM KLCI declined marginally into the negative territory as cautious sentiment persisted on the local bourse. Nevertheless, we expect to see bargain hunting activities across the sectors given the strong rebound on Wall Street overnight. We believe crude oil price to remain elevated for the near term on the back of reduced Russian output and larger-than-expected drawdown in the US inventories, thus inflationary pressure may not abate anytime soon.