Market Review

MY: The FBM KLCI closed lower amid concerns over global monetary policy normalisation, following the BoJ’s decision to raise interest rates to a 31-year high. However, market breadth was positive with 625 gainers ahead of 562 losers. Sector-wise, Technology outperformed, led by MPI and UNISEM.

US: Wall Street closed mixed as investors monitored the US 10-year Treasury yield climbing above 5% amid lingering geopolitical uncertainty. Brent crude, however, eased to around USD103/bbl as concerns over near-term supply disruptions moderated.

The Day Ahead

US: We expect Wall Street to trade on a mixed footing, with Brent crude holding above USD100/bbl and the US 10-year yield hovering around 5%, keeping inflation and valuation concerns in focus. Meanwhile, investor attention should centre on the S&P Dow Jones Indices quarterly rebalancing taking effect today, alongside continued optimism around AI spending. Bloom Energy (BE) remains in focus following its inclusion in the S&P 500, while Williams-Sonoma (WSM) could see continued interest after its 2Q26 comparable sales rose 6.2% and its full-year outlook was raised. Nvidia (NVDA) also remains a key AI bellwether amid continued debate over the pace of AI investment.

MY: On the domestic front, we expect the FBM KLCI to trade on a mixed note, with elevated yields and oil prices keeping sentiment measured, though stock-specific opportunities remain. ISF is positioned to benefit from hyperscale data-centre development, supported by its RM153.5m unbilled order book and earnings visibility through FY2029. Within the technology sector, DUFU remains well positioned to ride the HDD recovery, driven by stronger component sales, while NATGATE provides exposure to the optical-networking upcycle, with its longer-term earnings outlook tied to new US programmes. Meanwhile, HKB’s earnings are well supported by its record RM800.5m order book following the RM283.9m Wisma JKR Sarawak award.