Market Review

MY: Tracking the mixed overnight performance in the US, the local bourse closed on a cautious note last Friday, dragged down by losses in NESTLE and PETDAG. Sector wise, Construction (+1.68%) outperformed, led by IJM and KERJAYA, while Health Care (-0.74%) lagged the most.

US: Wall Street closed higher on Friday as a pullback in oil prices following reports of potential US-Iran de-escalation talks and strong gains in mega-cap tech offset ongoing bond market sell-off concerns. The Dow, S&P 500 and Nasdaq advanced by 0.9%, 0.5% and 0.5% respectively, while Brent crude reduced 2.6% toward USD97.6.

The Day Ahead

US: Following the US–China summit, we expect Wall Street to start the week firmer after both countries agreed to favourable tariff treatment covering USD30bn of non-sensitive goods in each direction and extended their trade truce by two months. Agriculture-related names such as Deere & Company (DE) and Archer-Daniels-Midland (ADM) could see improved sentiment, while Nvidia (NVDA) may remain in focus ahead of the US–China AI dialogue in November, as its guidance assumes no Data Center compute revenue from China. However, gains may be capped by renewed US–Iran tensions after President Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, keeping geopolitical and oil-price risks elevated.

MY: Tracking Wall Street’s positive close last Friday, coupled with easing US–China trade tensions following the summit, we expect the FBM KLCI to rebound today. Meanwhile, market direction could be influenced by the upcoming tabling of Budget 2027 on 9 October, with investors likely to focus on potential beneficiaries within the Construction, Utilities, Technology and Consumer sectors. Stock-wise, we favour AMBEST and GAMUDA, with the former benefiting from rising demand for precision engineering components amid the global semiconductor upcycle, while the latter is supported by a record RM62.5bn outstanding order book, equivalent to approximately 3.9x FY25 revenue.