Market Review

MY: The local bourse traded relatively muted amid escalating Middle East hostilities following strikes on Saudi energy sites. Sector-wise, Technology (+2.00%) outperformed, led by VITROX and INARI, while Health Care (-1.02%) lagged the most. IPO GTA debuted, closing at RM0.335 compared to its IPO price of RM0.35.

US: Wall Street closed lower as extended Middle East conflict drove oil prices higher, while elevated Fed rate-hike expectations and a sell-off in healthcare stocks further weighed on sentiment. The Dow, S&P 500, and Nasdaq retreated by 1.2%, 0.6%, and 1.3%, respectively, while Brent crude remained elevated above USD95/barrel.

The Day Ahead

US: Given the Brent oil spike nearer towards the USD100/bbl mark alongside 10-year Treasury yields pushing near two-decade highs, we expect Wall Street to maintain its cautious tone. Stock-wise, investors could monitor fabless semiconductor company Astera Labs (ALAB), as hyperscalers aggressively expand AI cluster deployments, which should drive high-margin demand for its PCIe 6.0 and CXL retimer connectivity hardware. Meanwhile, buying interest was also seen in Oracle (ORCL) following its gap-up, supported by its USD638bn Remaining Performance Obligation (RPO) backlog and 50%+ projected growth in Oracle Cloud Infrastructure (OCI). However, given that its price experienced a gap-up and faces resistance at its MA200, investors could wait for a pullback to a higher low as an entry level.

MY: Tracking Wall Street’s negative overnight performance, we believe overall sentiment for the FBM KLCI may stay generally weaker. However, given the elevated oil prices, traders could look for energy-related plays for short-term trading opportunities, particularly HENGYUAN and PCHEM. Meanwhile, we favour both SAM and EIPOWER, with the former acting as a proxy for Applied Materials and seeing robust equipment orders as the broader semiconductor market enters an AI supercycle, while the latter is supported by accelerated revenue conversion from mission-critical DC power delivery and its expansion into Thailand.