KUALA LUMPUR: There was a flattish opening on Bursa Malaysia as investors digested news that the US had entered into a technical recession following a second straight quarter of economic contraction.
Overnight, the US Commerce Department released data that showed the economy shrank 0.9% as inflation rates and rate hikes took a bite out of business and consumer spending.
This comes on the back of a 1.6% contraction in US gross domestic product in the first three months of 2022.
At 9.05am, Malaysia's benchmark FBM KLCI was down 0.23 point to 1,490.97 after two days of rallying, as investors searched for trading direction.
There was a positive trading breadth wtih 207 gainers compared with 93 decliners. Trading volume was 134.2 million shares valued at RM55.51mil.
The positive start comes on the back of a rally on Wall Street with gains of over 1% on each of the major indices amid bets that the recession will pressure the Fed to ease up on interest rate hikes.
However, the negative news of contraction in the world's largest economy is also causing some measure of concern in global markets.
"We believe the narrative that the US Fed will slow down the pace of interest rate hikes will continue to send positive signal to the regional and local bourses despite the contraction of GDP in the US," said Malacca Securities Research.,
On technical outlook, it said the FBM KLCI had crossed the resistance at 1,480 and the daily EMA60 after closing at its session high yesterday.
"Technical indicators remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above the 50 level.
"Next resistance is set along 1,500-1,530, while the support is located around 1,450," it added.
Spurred on by overnight gains in the Nasdaq and strong earnings results from the likes of Vitrox, Frontken and Unisem released yesterday, the local technology sector was in the spotlight.
Unisem jumped 17 sen to RM2.93, VItrox climbed 11 sen to RM7.72 and Frontken rose six sen to RM2.78.
Greatech gained 17 sen to RM3.97 while MPI addd 52 sen to RM32.70.
On Malaysia's blue-chip index, banks were mostly lower with Maybank falling two sen to RM8.83, CIMB down two sen to RM5.26 and RHB sliding two sen to RM5.87.
Press Metal, which was one of the day's top gainers yesterday, added five sen to RM4.88 while PETRONAS Chemicals took a breather from its rally, falling one sen to RM8.90.
Top active traders were CSH up 0.5 sen to 9.5 sen, LGMS gaining eight sen to 88 sen and Parkson up one sen to 18 sen.