KUALA LUMPUR: Bursa Malaysia gave up earlier gains to end the morning session lower as the index was dragged down by selling pressure in selected industrial products, such as Petronas Dagangan Bhd and utilities heavyweights.
Wall Street closed slightly higher as investors remained cautious, anticipating the upcoming two-day Federal Open Market Committee (FOMC) meeting, which may provide insights into the timing of potential rate cuts.
At lunch break, the FBM KLCI fell 3.89 points to 1,610.48 from Monday's close of 1,614.37, primarily due to losses in Petronas counters.
The benchmark index opened 2.63 points higher at 1,617.0 and moved between 1,609.26 and 1,617.37 throughout the morning trading session.
On market breadth, gainers surpassed decliners 611 to 536, while 451 counters remained unchanged, 802 untraded and nine others suspended.
Turnover amounted to 4.08 billion units worth RM2.41 billion.
Analysts said traders are awaiting the outcome of the FOMC meeting, as well as the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) over the next two days.
Malacca Securities Sdn Bhd head of research Loui Low said some of the heavyweight counters like Petronas Dagangan were dragging the overall performance of FBM KLCI.
Petronas Dagangan eased 74 sen to RM17.36, Sime Darby gave up nine sen to RM2.66, Nestle Bhd decreased RM2.30 to RM124.40, Petronas Chemicals declined five sen to RM6.66, Public Bank was two sen lower at RM4.09, and Petronas Gas shrank 10 sen to RM18.28.
Low also highlighted the competitive landscape in the fuel retailing business, influenced by the rise in electric vehicle usage and the possibility of reduced subsidies in the future.
"This could lead to increased use of public transport or carpooling," he told Business Times.
Nevertheless, Malacca Securities remains optimistic about the technology sector, driven by the growing demand for data centers, artificial intelligence, and cloud services. The firm expects earnings in the technology sector to recover moving forward.
"Meanwhile, we opine that the traders may reassess the overall building material segment linked towards data center and in the rising commodity upcycle with positive earnings growth.
"Also, we think the stocks within the Construction, Property and Utilities sectors should benefit in the rising data center environment," added the research house.
Rakuten Trade Sdn Bhd vice-president of equity research, Thong Pak Leng expects the index to hover between the 1,610-1,620 range and the emergence of bargain hunting activities in the event if the index tests the 1,610 mark.