KUALA LUMPUR (Oct 7): FTSE Bursa Malaysia KLCI faced one of its steepest one-day losses on Wednesday as it extended its downward trend, falling to an 11-month low as persistent foreign selling and cautious sentiment amid elevated oil prices continued to weigh on the local market.

At noon break, the benchmark index fell to 1,613.96 before slipping a further 21.57 points or 1.32% to 1,611.78 at market close — its lowest since December last year. This brings its year-to-date decline at 4.07%.

Banking stocks, which have heavy weightage on the FBM KLCI, weighed the index down as well. The Bursa Malaysia Financial Services Index, which also tracks non-bank firms such as insurers and stockbrokers, likewise fell to its lowest level in 11 months.

In a research note on Wednesday, Hong Leong Investment Bank (HLIB) said the KLCI has entered bearish territory and marked it as a “triple top breakdown”, after breaking below a key support zone of 1,655-1,667 points.  

Year-to-date, 12 out the 30 constituents were in the green. PETRONAS Chemicals Group Bhd (KL:PCHEM), Telekom Malaysia Bhd (KL:TM), and Gamuda Bhd (KL:GAMUDA) were among the list that had steadier positions, according to Bloomberg data.

HLIB said there was no clear reversal sign yet as the index is now below all key moving averages, with selling having become excessive in a short term period.

“Failure to reclaim 1,667-1,680 would keep selling pressure intact and expose further downside towards 1,624,” said HLIB.

In response to a query by The Edge, HLIB said they are still keeping their KLCI target at 1,720 points for end-2026.

“Though we estimated a higher forecast for the KLCI in 2027 at 1,790 points, we are unsure if this will still be the case due to current volatility,” said an analyst from HLIB. 

Beyond the immediate external pressures, HLIB said the upcoming expansion of the KLCI from 30 to 50 constituents in two phases from December 2026 and June 2027, as well as risks of economic and earnings disappointments amid higher-for-longer costs and supply-chain disruptions, could weigh on sentiment.

In a separate note, Apex Securities said Budget 2027 would offer greater clarity on fiscal priorities, infrastructure spending and measures to support domestic consumptions, which could help the KLCI but it would not be enough for a rerating as of yet.

Malaysia's stock exchange was not the only index facing heavy one-day losses. Regional peers South Korea's Kospi and Singapore's Straits Times Index also fell in the red.

The Kospi was down 137.49 points or 1.98% to 6,803.90 while the STI declined by 03.1 points or 1.63% to 5,608.44.