KUALA LUMPUR (July 14): Malaysian shares extended their gains on Tuesday as heavyweight industrials and other large-cap stocks bucked the broader decline in Asian markets.

Renewed concerns over the shipping flow at the critical Strait of Hormuz sent PETRONAS Chemicals Group Bhd (KL:PCHEM) surging 10% while Press Metal Aluminium Holdings Bhd (KL:PMETAL) climbed 4%. The rally also helped the FBM KLCI to reclaim the 1,700-point psychological level.

The 30-stock benchmark index closed at 1,719.94 points, up 21.50 points or 1.27%, marking its third consecutive day of gains.

Investors appeared less reactive to developments in the Strait of Hormuz, even as geopolitical risk remains elevated and oil prices climbed, while sharpening their focus on select sectors and stocks. 

“Higher oil prices are supporting oil and gas stocks, while investors are turning to banks, utilities and plantation companies because their earnings are seen as more stable during uncertain times,” according to Mohd Redza Abdul Rahman, director of research at BIMB Securities.

For CIMB Securities, the market’s gains are likely driven by specific investment themes, including plantation stocks on El Nino concerns and energy counters amid expectations of higher oil prices, rather than broad-based buying, said its head of research Ivy Ng.

Brent, the global benchmark for crude oil, rose to US$84 per barrel on Tuesday, after US President Donald Trump announced a blockade on Iranian vessels in the Strait of Hormuz while offering US protection for other ships passing through the critical waterway for a 20% fee.

The fragile truce has unravelled with the exchange of attacks and Iran has also struck vessels, as well as production facilities and pipelines of American allies in the Middle East.

Among other KLCI constituents, Public Bank Bhd (KL:PBBANK), PETRONAS Gas Bhd (KL:PETGAS), MISC Bhd (KL:MISC), and CelcomDigi Bhd (KL:CDB) each advanced more than 2%.