KUALA LUMPUR: Bursa Malaysia closed lower, as investors favoured China and Hong Kong stocks leaving regional emerging markets wanting.
The index struggled to maintain the 1,660 support level amid ongoing selling pressure from foreign funds.
By 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell by 0.67 per cent, down 11.18 points to 1,648.91, compared to Friday's closing value of 1,660.09.
The broader market also showed negative trends, with 652 stocks declining against 488 gainers, while 492 remained unchanged.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng emerging equity markets are currently experiencing significant selling pressure as global funds redirect capital toward Hong Kong and China.
"Following the recent surge in these two markets, driven by bold fiscal and monetary measures from Beijing, investors are seizing the opportunity to take profits from previously outperforming emerging markets.
"These markets, which had enjoyed strong uptrends in recent months, are now seeing heavy outflows as global funds capitalise on the attractive valuations and growth prospects in China and Hong Kong," he said.
He added that this rotation is placing downward pressure on emerging market equities, which are grappling with liquidity outflows in favour of renewed optimism around China's economic recovery and structural reforms.
"That being said, we believe the valuation of Malaysian equities remains attractive, and we do not discount the possibility of bargain hunting activities in the near future.
"As such, we anticipate the FBM KLCI to trend within the range of 1,650-1,670 for the week, with immediate support at 1,640 and resistance at 1,680," said Thong.