KUALA LUMPUR, June 8 (Bernama) -- Bursa Malaysia recorded a decline of 0.82 per cent at the close today with the diversified composition of the FTSE Bursa Malaysia KLCI (FBM KLCI) helping to cushion the impact of global market weakness. Global markets were jittery amid resurfacing geopolitical tensions in West Asia and heavy selling in global technology counters. At 5 pm, the FBM KLCI finished 13.91 points lower at 1,679.52 from last Friday's close of 1,693.43. The benchmark index opened 9.89 points weaker at 1,683.54 and traded between 1,676.95 and 1,684.14 throughout the session. Losers surpassed gainers in the broader market by 916 to 340, while 455 counters were unchanged, 964 untraded and 13 suspended.
South Korea’s equity market may be poised for a rebound after a sharp selloff, with Goldman Sachs maintaining a constructive outlook on the long-term AI-driven bull cycle.
Sharp Selloff Triggers Market Shock
The Kospi plunged as much as 8.8%, triggering a circuit breaker and leading a broader decline across Asian tech stocks.
The selloff followed:
- A strong rally driven by AI optimism
- Heavy concentration in semiconductor and tech names
- Increased use of leverage among retail investors
Correction Driven by Unwinding of Leverage
According to Goldman strategist Timothy Moe, the decline reflects:
- Unwinding of leveraged positions
- Elevated speculative activity, particularly in leveraged ETFs
This suggests the move is largely technical rather than fundamental.
Fundamentals Remain Strong
Despite the volatility, Goldman highlighted that:
- Corporate earnings outlook remains intact
- Valuations are still attractive relative to growth prospects
The correction is seen as a healthy reset within an ongoing bull market, rather than a structural downturn.
AI Theme Continues to Support Outlook
South Korea’s market remains heavily exposed to the global AI supply chain, particularly through semiconductor leaders.
Goldman recently upgraded its outlook for both South Korea and Taiwan, citing:
- Strong demand for AI-related chips
- Continued earnings growth from tech-heavy indices
Outlook: Recovery and New Highs Possible
Goldman expects the market to:
- Stabilise after the selloff
- Gradually recover and potentially reach new highs
The current pullback is viewed as part of a normal correction phase following an extended rally.
Investor Takeaways
- Kospi’s sharp drop was driven by technical factors, including leverage unwinding.
- The correction is viewed as temporary within a longer-term bull trend.
- AI-driven earnings growth remains the key support for the market.
- Valuations are considered attractive after the pullback.
- Investors may see opportunities in quality semiconductor and tech names.
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