The local stock market continues to be under pressure as the main index FTSE Bursa Malaysia KLCI recorded a decline for two consecutive weeks. This situation reflects investors’ increasingly cautious sentiment in a global environment filled with uncertainty.
US-Iran War Conflict Triggers Globalization ‘Risk-Off’
The main pressure comes from geopolitical developments in the Middle East, particularly involving the United States and Iran.
The escalating tensions after the negotiations failed to reach an agreement have prompted investors to reduce exposure to risky assets. In this situation, the outflow of funds has become more pronounced as investors choose to wait for further developments before making new investment decisions.
At the same time, global oil price movements also play an important role. Tensions in the strategic Strait of Hormuz route, which is the heart of the world’s oil trade, have increased concerns about supply disruptions.
Although high oil prices usually benefit producing countries like Malaysia, the global uncertainty has caused market sentiment to remain weak overall.
Wall Streets Unsettled
External factors also added to the pressure as global markets, particularly Wall Street, showed inconsistent movements. The absence of strong economic catalysts and concerns over the direction of global monetary policy made investors more defensive.
This can be seen when interest in certain sectors such as energy and commodities increased, but it was not enough to offset the selling pressure in the broader market.
The movement of the FBM KLCI during this period shows that the market is still searching for a clear direction. Geopolitical uncertainties and mixed economic data continue to affect sentiment, causing the index to move in a weak state.
As long as global tensions have not subsided, the local stock market is expected to remain cautious with a tendency to continue moving in the negative zone in the near term.
