Following a sharp decline in US tech stocks overnight, the Malaysian technology sector faced a sell-off, with the Technology Index dropping 1.5%. Semiconductor-related companies like Vitrox and Frontken led the losses, amidst market concerns over elevated valuations.
The Malaysian technology sector was the worst performer on Tuesday, with the Technology Index falling 1.5%, primarily as investors reacted to the overnight 1.8% drop in the Nasdaq Composite and engaged in profit-taking. Semiconductor testing equipment manufacturer Vitrox fell 2.1% to RM7.50, while Frontken declined 1.9% to RM3.10. Although the long-term demand outlook remains robust, particularly in Artificial Intelligence (AI) and data center segments, the market remains cautious about the high valuations of tech stocks in the short term. Analysts view this pullback as healthy, providing an opportunity for long-term investors to buy on dips, but advise close monitoring of global chip sales data and quarterly reports from US tech giants.
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