KUALA LUMPUR, March 14 (Bernama) -- The FTSE Bursa Malaysia KLCI (FBM KLCI) ended the week slightly higher, in line with regional indices despite the weaker performance on Wall Street overnight. At 5 pm, the FBM KLCI rose 2.12 points or 0.14 per cent to 1,512.15 from Thursday’s close of 1,510.03. The market bellwether opened 10.08 points lower at 1,499.95, and moved between 1,493.29 and 1,516.25 throughout the day. On the broader market, gainers outpaced losers with 680 to 292, while 437 counters were unchanged, 1,009 untraded, and 13 suspended. Turnover was marginally lower at 3.24 billion units worth RM2.5 billion from 3.25 billion units worth RM2.90 billion on Thursday.
Citigroup has shifted its outlook on global equities, downgrading U.S. stocks to neutral from overweight, while upgrading China tech stocks to overweight, citing several key factors that make Chinese technology stocks an attractive investment.
Key Takeaways:
U.S. Stocks Downgraded: Citi strategists, led by Dirk Willer, noted that U.S. exceptionalism seems to be “pausing.” The S&P 500 breaking its 200-day moving average and the poor performance of big tech stockshave signaled bearish momentum for U.S. equities. The “Magnificent Seven” tech giants lost a collective $759 billion in market cap on Monday, marking the largest one-day loss in history.
Short-Term Caution: While Citi maintains a neutral stance on U.S. stocks for the next three to six months, they remain cautious about the AI bubble and expect negative U.S. data to persist in the near term. In the long run, Citi believes the U.S. will still be a leader, particularly in AI, alongside China.
Reasons to Love China Tech:
Tech Sector Advances: Citi’s analysts have become more optimistic about China tech stocks, citing two key factors:
- China’s tech sector is competing at the Western frontier, despite export controls.
- President Xi Jinping has embraced the tech sector, making it more attractive.
Valuation Advantage: Despite a recent rally, China tech stocks, including those in the Hang Seng China Enterprises Index and Hang Seng TECH Index, remain relatively cheap compared to global AI assets.
Tariff Impact: While U.S.-China tariffs have risen, Citi believes they’ve had limited impact on China's market. With the potential for U.S.-China negotiations, the outlook for China’s tech sector looks promising.
Market Reactions:
U.S. Stock Movements: After the S&P 500’s worst day since December, U.S. stock futures are showing signs of a rebound, with Treasury yields steady and the dollar weaker.
Sector-Specific News:
- Oracle (ORCL) fell due to disappointing cloud-service revenues.
- Delta Air Lines (DAL) and other travel stocks dropped on weak domestic demand.
- 2seventy bio (TSVT) saw shares jump after announcing an acquisition by Bristol-Myers Squibb.
Commodity Prices: Oil prices dropped significantly by -3.48% while gold saw a modest rise of 0.01%.
Global Economic Concerns:
- Tariff Impact: Goldman Sachs has revised its U.S. growth forecasts downwards, citing a larger-than-expected increase in U.S. tariffs, now expecting a 10% rise in the tariff rate this year, significantly higher than previous projections.
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