Market Review

MY: The FBM KLCI fell 1.1% to close at 1,679.2 pts amid broad-based profit-taking and cautious regional market sentiment. The Energy sector (+0.8%) emerged as the top outperformer, led by HIBISCS (+4.0 sen) and ARMADA (+1.5 sen), while the Industrial Products & Services sector (-1.5%) lagged behind.

US: Wall Street ended lower as the Dow dropped 1.2%, the S&P 500 slipped 0.4%, while the Nasdaq finished flat following the Fed’s first-interest rate hike in three years. Brent crude oil declined, while the US 10-year Treasury yield pushed above 5.0% as Fed Chair Kevin Warsh reiterated concerns over persistent inflation risks.

The Day Ahead

US: We expect Wall Street to trade on a mixed footing as investors digest the Fed’s 25bps rate hike and hawkish inflation commentary. While a measured tightening path could provide some relief to growth valuations, elevated oil prices remain an inflationary risk. Intel remains in focus following reports of exploratory talks with SK Hynix to manufacture memory chips in the US, albeit no agreement has been finalised. GE Vernova could benefit from surging demand for gas turbines and power equipment amid AI data-centre expansion, while Bloom Energy remains supported by growing adoption of onsite power solutions for AI infrastructure.

MY: On the domestic front, the FBM KLCI is expected to trade on a mixed footing following overnight weakness on Wall Street, as elevated oil prices, higher Treasury yields and the Fed’s latest rate hike keep risk appetite cautious. YTLPOWR could gain traction securing four additional Siemens Energy gas turbine units, taking total reservations to seven with combined capacity exceeding 5,250MW, supporting its power and data-centre expansion. FRONTKN also warrants attention after its subsidiary acquired an industrial property in Tainan for NT$920m (RM118.2m) to support future capacity needs, while UUE is expanding into EHV substation engineering through a new JV with EGP Energy, positioning it to pursue larger grid infrastructure projects.