FBM KLCI starts 2026 with early morning rally

KUALA LUMPUR: As trading kicked off in the new year, the domestic market was quick to shake off the cobwebs of the year-end with investors returning to a buying mood.

Despite a softer opening - the FBM KLCI started 0.68 points lower at 1,669.08 - the benchmark index was quick to ramp up to 5.63 points higher at 1,675.39 by 9.20am.

Much of the gains were owing to energy and plantation plays including Kuala Lumpur Kepong rising 22 sne to MR20.02, PPB rising 16 sen to RM10.80 and PETRONAS Gas climbing 14 sen to RM18.34.

Bank counters were also seen bouncing back after last Friday's sell-off. CIMB gained seven sen to RM8.17, Maybank added four sen to RM10.40, Public Bank rose three sen to RM7.12 and Hong Leong Bank added two sen to RM22.30.

Analysts, however, were wary over the weak technical indiciators and profit-taking pressure that marked the final day of 2025 trading.

"The local benchmark index has shown signs of fatigue after its recent strong run, with profit-taking activities and selling pressure likely to dominate near-term trading," said TA Securities in its market commentary.

"Nevertheless, any additional pullbacks may present attractive entry opportunities after the recent strong run, particularly for investors positioning themselves for a potential medium-term rebound."

Rakuten Tade opined that the local bourse may be taking a breather before realigning itself for a possible Chinese New Year rally as market liquidity builds up. "For today, we expect the index to trend between the 1,650-1,670 range," it said.

On the international front, a cause for concern in markets is the shocking news that the US military had launched an attack on Venezuela and captured its sitting President. 

Plans for the US to take over administration of the country for the time-being while US oil companies enter the country are in the offing, igniting strong criticism from both within the US and the international community.

Malacca Securities said it believes sentiment may turn negative in the near-term due to the Venezuela situation, which is triggering a risk-off sentiment on Wall Street.

It aded that given the volume of energy supplies imported from Venezuela, China may retaliate, potentially causing a spike in oil and gold prices.

"This would create a natural demand for gold, from which Well Chip, Evergreen Max Cash and Pappajack are likely to benefit. Notably, Well Chip’s outstanding loan book is one of the largest as compared to the listed peer," it said in a note.