KUALA LUMPUR: Malaysia's blue-chip index is seeing some profit-taking after the previous day's rally, with the broader sentiment capped by an impasse in US-Iran negotiations and still-high crude oil prices.

At 9.08am, the FBM KLCI was down 4.65 points to 1,736.96, paring the 10-point gain made in the previous day.

Brent crude futures for October delivery slipped slightly to below US$88 a barrel as supply lanes remained closed in the Strait of Hormuz amid ongoing talks between the US and Iran.

Apex Securities said the FBM KLCI was pressing against the upper boundary of the downward-sloping channel that has capped price action since peaking in January.

"Although this is a positive sign, we are still cautious because the index has tried several times since May to break above this resistance level but has not been able to sustain the breakout. 

"The overall downtrend has also not been clearly broken yet," it said in its technical reading.

For the trend to truly turn positive, the research firm said the index needs to break above the channel and then stay above the 1,760 – 1,770 level. 

On the downside, 1,720 remains the immediate support, while a failure to sustain the rally could see the index retreat towards 1,700.

More optimistically, a mild US inflation report published overnight helped to affirm the view that the Federal Reserve will hold interest rates in September.

"Following the in-line July inflation report, Fed rate-hold odds for September have risen to around 60%, and strong AI-related earnings continue to support market strength," said Apex.

On the blue-chip index, Press Metal

slumped 13 sen to RM7.86, IOI shaved eight sen to RM4.47 and SD Guthries slid six sen to RM6.74.

Bank stocks were also on the retreat, led by Hong Leong Bank falling 28 sen to RM22.42, Maybank down two sen to RM10.58, Ambank down four sen to RM7.33 and Public Bank sliding two sen to RM5.17.

The top active shares were Key Asic up one sen to 4.5 sen, Oppstar gaining three sen to 71.5 sen and Aemulus

rising three sen to 45 sen.