Malaysian equities face cautious trading amid geopolitical risks

Malaysian equities are expected to trade cautiously due to weakening global market sentiment and heightened geopolitical risks in the Middle East. While the FBM KLCI showed resilience, closing at 1,733.36 in one session, market breadth remained negative with a high number of decliners.

Defensive sectors, particularly plantation and energy stocks, have provided support. Plantation stocks benefited from firmer commodity prices, while energy players rallied following Brent crude oil futures rising above US$90 a barrel. Specific gainers included PETRONAS Chemicals, Kuala Lumpur Kepong, and SD Guthrie.

Market analysts suggest that short-term sentiment will be dictated by external risks. A constructive scenario for recovery would involve stabilizing oil prices, no further escalation in Middle East tensions, and softer bond yields. Conversely, increased US-Iran tensions and surging bond yields could intensify defensive positioning among investors.