KUALA LUMPUR (March 9): Malaysian stocks fell on Monday amid escalated geopolitical tensions in the Middle East sending crude oil to a high of US$118.93 a barrel.

At 8.41pm on Monday, Brent crude was trading at US$103.48 per barrel.  

The benchmark FBM KLCI declined as much as 54 points, or over 3%, to 1,664.07. By the close, the index had pared some losses to end at 1,674.17, still down 2.6%.

A total of 25 of the index’s 30 constituents ended in the red, led by Sime Darby Bhd (KL:SIME), which dropped more than 8% to settle at RM2.26.

The ringgit, in contrast, gained 0.53% against the greenback to RM3.969.

Meanwhile, the Bursa Malaysia Energy Index, which tracks 32 stocks including oil and gas service providers, bucked the broader market trend. The gauge rose to as much as 833.05 — its highest level since Jan 24, 2025 — before ending the day up 1.4% at 806.74.

Leading the energy rally were exploration and production firms Petra Energy Bhd (KL:PENERGY), which jumped 33% to 83.5 sen, and Hibiscus Petroleum Bhd (KL:HIBISCS), which rose 17% to RM2.39.

Public Investment Bank raised its target for Hibiscus to RM3.40 from RM2.40 in a note, citing the company’s strong earnings sensitivity to oil price movements.

Oil services companies could see higher activity levels as rising crude prices boost cash flows for upstream operators, potentially supporting increased project spending, analysts said.

HLIB also favoured Dialog Group Bhd (KL:DIALOG), noting that about 15% to 20% of its earnings come from upstream operations, giving the group exposure to the current crude rally. The stock, which has the largest market capitalisation among Malaysian energy stocks, was up nearly 11% to RM2.12.

Sustained Brent prices for about a month would likely translate into higher realised prices for Dialog’s crude sales, supporting improved upstream earnings.

The research house added that Dialog’s resilient midstream operations, which contribute about 50% to 60% of group earnings, are supported by utilisation rates above 90% at its independent tank terminals.

HLIB maintained its 'buy' call on Dialog, with its target price slightly revised to RM2.50 from RM2.49.