What to expect on Bursa Malaysia this Friday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Malaysian stocks rebounded yesterday in line with the gains among regional indices as they reacted positively to the US Federal Reserve’s decision to keep interest rates unchanged.

Bank Negara Malaysia’s (BNM) decision to keep interest rates unchanged also bolstered sentiments.

There was fresh buying from foreign funds that helped the key index to retest the 1,440 level albeit the gains were relatively mild. The lower liners also posted gains as the improved sentiments resulted in market breadth turning positive.

Market conditions could continue to display signs of stability on hopes that interest rates have already peaked even though the elevated rates are likely to persist.

The increased hopes are premised on the signs of moderation in the US economy and easing inflationary pressures that is lifting the odds for a soft landing.

With Wall Street on a strong mend, the positivity should also permeate to stocks on the FBM KLCI to extend their near-term upsides albeit the recovery may still be measured due to the continuing cautiousness over Malaysia’s economic and corporate earnings outlook.

The immediate hurdle is the 1,440 level that should be cleared easily which is followed by the 1,445 level and the psychological 1,450 level. The supports, meanwhile, remains at the 200-day moving average line of 1,437 and the 1,430 level.

Malacca Securities Research

Following the rate pause by the Fed after the Federal Open Market Committee (FOMC) meeting and Bank Negara Malaysia (BNM) keeping the overnight policy rate (OPR) at 3%, the FBM KLCI ended on a positive note yesterday.

Also, global markets were traded actively higher following the jump in Wall Street as the Dow rebounded more than 4% over the past five days with the help of better-than-expected corporate earnings.

We believe this buying interest could spill over towards stocks on the local front, especially the small cap and lower liners.

Despite the BNM maintained the OPR, the ringgit has strengthened against the US dollar during the session, trading at RM4.75/US$ (from the recent low of RM4.7925/US$).

On the commodity markets, Brent crude prices rebounded near to 3% after the greenback declined.

The FBM KLCI ended higher and is still hovering within a flag formation awaiting a breakout move. The technical readings on the key index are mixed with the MACD Histogram flattish around zero while the RSI is slightly above 50.

The resistance is pegged around 1,450-1,460 while the support is at 1,420-1,430. – Nov 3, 2023

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