A Kangaroo market is characterised by frequent upward and downward swings that rapidly change investor sentiment.PETALING JAYA: Investors should prepare for a trading environment where sharp market swings become increasingly common, said a research house.JF Apex Securities describes the current environment as a “Kangaroo market” characterised by frequent upward and downward swings without establishing a sustained directional trend.It said unlike previous geopolitical events that centred around a single catalyst, markets today are simultaneously digesting Middle East tensions, evolving shipping disruptions, US president Donald Trump's renewed tariff measures, uncertain Fed policy expectations, and slowing Chinese demand.The research house said global oil markets are no longer focused solely on the Strait of Hormuz. “Instead, investors are increasingly monitoring whether disruptions spread across multiple shipping routes linking the Persian Gulf, Red Sea, Suez Canal and Mediterranean.“As a result, sentiment is likely to change rapidly as headlines evolve. One day markets may rally on easing geopolitical concerns, only to reverse sharply following renewed attacks or policy announcements,” it said in a note.It added this “headline-driven” environment is likely to persist over the coming months.Rather than trading during every geopolitical headline, JF Apex Securities advised investors to remain selective and accumulate fundamentally strong companies during periods of excessive market weakness.It maintained its FBM KLCI year-end target of 1,787 points despite the increasingly uncertain geopolitical backdrop.Malaysia’s strong fundamentalsIt said while geopolitical developments have become more complicated, it does not materially alter Malaysia’s underlying economic fundamentals.On the external front, it noted the structural artificial intelligence (AI) driven technology upcycle continues to underpin demand for Malaysia's electrical and electronics (E&E) exports, which remain largely insulated from fluctuations in crude oil prices.Domestically, investment momentum remains supported by ongoing data centre developments, while inflation is expected to stay well contained despite higher oil prices, thanks to the government’s fuel subsidy mechanism.“As such, we believe Malaysia's economic outlook remains broadly intact.
More importantly, history suggests markets eventu…
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