KUALA LUMPUR: Bursa Malaysia is execpted to benefit from a regional relief rally as fears over an overheating US economy subsided following a job reports that showed cooling momentum.

Asian markets have seen a resurgence in buying momentum, especially in tech stocks, as signs of easing US inflation reduced odds the Federal Reserve would tighten rates this year.

"The Asian tech unwind may have been a short, sentiment-driven air-pocket rather than the start of a deeper de-rating, and should help restore risk appetite for Malaysia's own chip-linked proxies," said Apex Securities in a note.

The research firm noted, however, that the long Independence day weekend in the US and no fresh domestic catalysts is likely to result in thin trading this week and leave Bursa Malaysia vulnerable to headline-driven swings.

"Bank Negara Malaysia's this Monetary Policy Committee meeting on July 9 will be the key domestic catalyst to watch, with the OPR widely expected to be held at 2.75%. 

"Beyond the OPR decision, the Johor state election on July 11 adds a further layer of domestic political risk that could weigh on sentiment in the coming week.

"On balance, we advise investors to stay cautious heading into the week ahead."

The FBM KLCI was nearly flat at 1,679.51 points at 9.15am.

Stocks that saw strong buying interest included Heineken up 20 sen to RM19.50, KLCC rising 13 sen to RM8.99 and PTT jumping nine sen ot RM1.59.

Leading actives on the market were AMS climbing 6.5 sen to 48 sen, Tanco flat at 17.5 sen and Nexgram

unchanged at five sen.