Growing Middle East conflict sends traders to the sidelines

KUALA LUMPUR: Traders on Bursa Malaysia were expectedly sidelined on Monday as the intensifying conflict in the Middle East added to the global uncertainty.

The benchmark FBM KLCI started the week just 0.24 points lower at 1,517,87, but drifted lower in the ensuing minutes below the 50-day moving average.

Rakuten Trade noted that there remains growing anxieities over China and US trade negotiations, which coupled with the Iran-Isreal situation, would have traders taking pause for more clarity.

"The situation has worsened with both countries launching

airstrikes. As a result, crude oil prices surged with the Brent crude surging past US$70/barrel to end at almost the US$75/barrel," said the broker in a note.

TA Securities Research, meanwhile, noted that technical momentum trande indicators on the FBM KLCI are mostly easing off, suggesting the index will remain in consolidation mode with a downside bias.

While acknowledging the juttery sentiment as investors monitor developments in the Middle East, the research firm said investors will also be watching Investment, Trade and Industry Minister Tengku Zafrul Aziz's upcoming visit to Washington for guidance on Malaysia-US trade relations.

"Immediate index resistance remains at 1,564 with tougher resistance coming from the recent high of 1,586, and 1,610 ahead. Immediate support is maintained at 1,490, with stronger support seen at 1,465 followed by 1,444," it said in its market commentary.

There was active trading in oil-related counters on Bursa Malaysia given the recent surge in oil prices.

Velesto rose 0.5 sen to 19 sen, Hibiscus Petroleum jumped 10 sen to RM1.76 and Bumi Armada rose two sen to 51 sen.

Among the FBM KLCI blue chips, Kuala Lumpur Kepong climbed 26 sen to RM19.96, PETRONAS Chemicals rose 11 sen to RM3.44 and PETRONAS Gas gained 12 sen to RM17.96.