PetChem leads FBM KLCI higher as Hormuz attacks ignite oil supply concerns

KUALA LUMPUR: A jump in crude oil prices following Iran's attack on tankers in the Straits of Hormuz is spurring activity in the energy sector once again, even as investors rotate out of the overheated AI-drive technology sector.

As at 9.11am, Brent crude futures for August delivery were up 1.87% to US$75.54 a barrel.

While US markets were driven down overnight by sustained selling in chip-related stocks, the FBM KLCI rose 3.05 points to 1,685.98 with the biggest gains seen in PETRONAS Chemicals and heavyweight banks.

PETRONAS Chemicals rose 10 sen to RM4.35 while Maybank gained two sen to RM10.94, CIMB added five sen to RM7.65 and Hong Leong Bank climbed 14 sen to RM22.10.

Stocks on the broader market also seeing positive interest included MPI rising 46 sen to RM46.30, Allianz gaining 28 sen to RM20.88, Carlsberg rising 10 sen to RM16.40.

Most actively traded shares were Meston up one sen to 11.5 sen, Pentech gaining one sen to 29 sen and AirAsia X shedding two sen to RM1.16.

Apex Securities, however, urges caution as the spike in oil prices creates a fresh input-cost risk for the region.

"For the KLCI, this suggests our previous view of narrow, heavyweight-led gains is now at risk of turning into outright profit-taking pressure, particularly in technology and semiconductor-linked names; we would turn more defensive nearterm and await clearer signs of stabilisation in regional chip sentiment before re-engaging," it said in its outlook.

While investors await Bank Negara's overnight policy rate decision on Thursday, and the Johor elections on Saturday, the research firm said external volatility is likely to dominate price action for the remainder of the week.

Meanwhile, South Korea's Kospi rebounded after the previous day's slump, adding 0.85% to 7,721. Japan's Nikkei was nearly flat at 68,261.