KUALA LUMPUR: The overnight record-breaking performances of major US indices are returning some optimism to the domestic market, although the benchmark index remains sideways as investors opt for caution.
After retreating in the previous session, the FBM KLCI was seen picking up slightly on Thursday, rising 1.15 points to 1,604.38 at the open.
The release of the US consumer price index for April showed a cooler-than-expected rate of inflation, bolstering hopes the US Federal Reserve could begin cutting rates this year.
The CME FedWatch Tool, which analyses 30-day Fed funds futures pricing data, now projects a 74.5% probability the central bank will cut rates by at least 25 basis points in September.
“In view of the strong momentum in the US, we expect buying interest to spillover towards the local exchange, focusing on the technology sector,” said Malacca Securities Research in a note.
The research firm added that the fresh catalyst of the US imposing higher tariffs on China by stages from 2024 to 2026 will provide a boost to Malaysian companies in view of trade diversions going forward.
“The US imposing higher tariffs on China products may benefit the gloves, semiconductor, EMS, and metal-related industries.
“We also like the construction, building material and property sectors with the ongoing domestic catalysts such as the ongoing mega infrastructure projects and the optimism over NETR and NIMP master plans,” it added.
Following the previous day’s sharp rally, there was profit-taking seen in the glove counters with Top Glove once again topping the most actively traded list.
Seeing heavy trading activity, the world’s largest glove maker shed six sen to RM1.20.
In the sector, Hartalega fell 24 sen to RM3.58, Kossan slid nine sen to RM2.65, Supermax slid eight sen to RM1 and Careplus dropped three sen to RM35 sen.
Malaysia Airports dropped 18 sen to RM10.22 after a consortium led by Khazanah Nasional and the EPF made a takeover offer for the company at RM11 per share.