Rally lifts local stocks as US, UK reach tariffs deal

KUALA LUMPUR: Optimism over easing trade tensions helped to lift Bursa Malaysia stocks, but the main index remained capped by the 1,550 psychological resistance as the weekend approached.

The FBM KLCI rose 2.25 points to 1,544.99 at the opening bell as sentiment improved following the announcement that the US and UK had reached a deal over trade tariffs, although many specifics of the deal remained pending.

While the trade agreement - Trump's first following the implementation of tariffs across its trading partners - has boosted sentiment, cautious sentiment remains as investors await the outcome of US-China trade talks this weekend.

Meanwhile, Rakuten Trade noted that Bank Negara's rate cut in bank's statutory reserve requirement from 2% to 1% may spur market confidence, although it added that banks will have to pay a part in being less stringent in loans approvals.

"We view BNM’s latest move may encourage some buying interest in the banks and expect the index to hover within the 1,545-1,560 range today," it said in its commentary.

Malacca Securities Research was also bullish on bank stocks, expecting traders to look for trading opportunities in lagging banking stocks such as Alliance and AmBank.

Additionally it said the AI theme has regained momentum following the potential revision of the Biden’s administration’s chip restriction act.

"This could spur trading interest in the construction, utility and technology sectors."

Among active counters on Bursa Malaysia, Permaju Industries was flat at 3.5 sen, Lotte Chemical Tital jumped 6.5 sen to 61 sen and Sapura Energy was unchanged at 4.5 sen.