0425 GMT - The outlook for Malaysia's stock market remains cautious, though investors may see near-term support from its 2027 Budget. Malaysia's equity market faces higher U.S. interest rates, unresolved Middle East tensions and potential wage pressures, Kenanga IB analysts say in a note. While Budget 2027 could provide near-term support, other tailwinds include AI-related structural growth, energy transition and data centers, they note. Citing a barbell strategy, the analysts name defensive sectors as preferred, such as banking and healthcare industries after recent share-price declines. Cyclical sectors could face greater pressure from a potential interest-rate hike in 1H 2027 and higher costs, they add. Kenanga lowers its year-end KLCI target to 1770 from 1775. The KLCI is 0.8% lower at 1599.31.