KUALA LUMPUR (June 8): Malaysian shares ended broadly lower on Monday, with technology counters leading losses as investors reacted to a global sell-off in technology stocks triggered by concerns over the sustainability of artificial intelligence (AI)-driven growth.

Friday’s selldown on Nasdaq spilled over to technology-heavy markets such as Japan and South Korea, where investors are reducing exposure to artificial intelligence (AI) related stocks after US semiconductor giant Broadcom maintained its guidance for 2026 instead of upgrading its outlook.

"Global markets will likely face ongoing volatility as tech sectors continue to digest AI valuation concerns and global risk-off sentiment persists," BIMB Securities analyst Mohd Redza Abdul Rahman said in a note on Monday.

The country’s benchmark FBM KLCI fell as much as 16.48 points or 0.97% to an intraday low of 1,676.95 before trimming some losses to close at 1,679.51, down 13.92 points or 0.82%. Among the biggest drags on the benchmark index was the country's largest home products retailer Mr DIY Group (M) Bhd (KL:MRDIY), which fell 3.11% to close at a day-low of RM1.56.

The Bursa Malaysia Technology Index, which tracks technology-related counters, was the worst-performing segment on Bursa Malaysia after dropping more than 4% during the day before recovering slightly to close 2.44% lower.

ViTrox Corp Bhd (KL:VITROX), the largest stock on the index in terms of market capitalisation, was down 2.32% by the end of the day, followed by Malaysian Pacific Industries Bhd (KL:MPI) at 2.78% and Inari Amertron Bhd (KL:INARI) at 0.89%. 

A boom in AI and high-performance computing had driven up valuations of companies in China, South Korea, and Taiwan catering to the unprecedented demand for their hardware. 

Electrical and electronic products account for about 40% of Malaysia’s total export and the country is home to some of the world’s most important semiconductor firms such as US-based Intel and Germany’s Infineon Technologies hosting massive facilities employing thousands of engineers.

Malaysia and Thailand, despite their strong electronics exports, have not had major upgrades to stock market valuations, DBS noted.

“Domestic politics and lacklustre performance of the non-electronics sectors have gotten in the way to some extent,” chief economist Taimur Baig and strategist Chang Wei Liang wrote in a joint note. “Still, neither index has lost money for their investors so far this year.”

For Tradeview Research analyst Tan Jia Hui, however, the current correction in technology stocks could be short-lived. "Technology continues to be a hot topic. I would suggest investors buy on weakness," she added. 

Outside the technology sector, plantation counters provided a rare bright spot. The Bursa Malaysia Plantation Index, which tracks 39 stocks, was the only major sectoral index to end higher on Monday. The sector was supported by expectations of tighter palm oil supply due to seasonal production weakness and concerns that recent dry weather conditions could affect output growth in the coming months.

"[At the same time], the elevated energy prices and implementation of the B50 biodiesel programme in Indonesia are supporting market sentiment in the palm oil market," said David Ng, a senior trader at proprietary trading firm IcebergX. "We should see this price trend continue over the medium term given the recent slew of positive factors lifting market sentiment."

Investor sentiment was also affected by geopolitical conflicts and domestic political risks, according to Berjaya Securities head of research Kenneth Leong.  

Crude oil was higher as the global benchmark Brent climbed 3.9% during Asian trading hours on Monday, while the strengthening US dollar and rising geopolitical uncertainties also weighed on the ringgit. The local currency weakened to 4.0735 against the US dollar as at 5.15pm on Monday, extending its decline after breaching the 4.00 level.

"MYR is not insulated from external headwinds," said UOB Malaysia senior economist Julia Goh. "While the current growth-inflation mix remains favourable, stagflation risks could escalate should disruptions to global oil supply persist into 3Q2026".