KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
JPMorgan strategist Gabriela Santos Aliaga urges investors to adopt a defensive, diversified stance as market risks rise amid a potential prolonged trade war and shifting macro conditions.
Market Outlook: A Volatile Crossroads
With President Trump’s "Liberation Day" tariffs set to trigger a broader trade confrontation, JPMorgan sees this moment as the beginning, not the end, of multi-front economic disruption.
Aliaga likens the environment to an unpredictable spring day: investors need an "all-weather" portfolio that can adapt to varying macro shocks.
Sector Rotation Underway
Big tech is facing valuation pressure as investors de-risk.
Capital is flowing into energy, materials, utilities, and financials—sectors seen as more resilient in a protectionist climate.
AI remains a long-term structural theme, but near-term uncertainty is clouding conviction around semiconductors and software earnings.
Fixed Income Back in Focus
JPMorgan is bullish on duration—longer-dated bonds now offer a favorable risk-reward profile.
Valuations across many fixed income instruments are still recovering from 25-year lows, presenting selective opportunities.
International Equities: A Relative Value Play
Positioning in global equities remains light, and JPMorgan sees tailwinds as investors look beyond US-centric risks.
However, the international space is not immune to spillover effects from US tariffs—especially export-dependent economies in Asia.
AI: Long-Term Case Remains, Near-Term Volatility Grows
The AI theme is maturing fast, but expectations are difficult to quantify.
NVIDIA’s pullback is more about macro sentiment than fundamentals. JPMorgan remains constructive on AI over the medium-to-long term, citing few players well-positioned to lead.
Capital Flows and Investor Behavior
Despite volatility, many investors remain fully allocated—especially to large-cap tech.
Others are holding cash and short-term fixed income, benefiting from attractive coupons.
Some investors who missed the tech rally are using this correction as a re-entry point for long-term growth exposure.
Key Takeaways
Now is a time for caution, with a focus on portfolio resilience, sector diversification, and global exposure.
Tech overweighted portfolios should be reassessed, especially given valuation sensitivity and policy risks.
Fixed income is regaining strategic value, particularly long-duration assets.
AI remains a long-term structural play, but expect uneven performance as expectations recalibrate.
Volatility may persist through mid-year, with potential improvement in sentiment only if trade risks ease or growth stabilizes.
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