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

The FBM KLCI retreated more steeply than expected yesterday as it pulled back in tandem with slippage on Wall Street a day earlier.

On the key index, it was mainly banking stocks that led it lower on profit taking but plantation stocks provided some support as they were the day’s big movers.

The broader market was also mostly lower but their pullback was relatively mild. Still, market breadth was negative as traded volumes retreated further from a day earlier.

Yesterday’s retreat left the key index at the 1,455-support level.

Conditions in the day ahead could remain listless with the extended Christmas break next week that could still keep market players and fresh buying interest on a low for the time being.

Consequently, the key index is likely to drift and could end the week on a subdued note as many market players will be on their year-end break.

In addition, there will be few leads for market players to follow with any rebound likely to be relatively modest with the key index just possibly aiming for the immediate resistance at the 1,460 level despite the strong overnight recovery among Wall Steet stocks.

Further ahead, the key resistance remains at the recent high of 1,466 points followed by the 1,471 level. Below the 1,455 level, the psychological level of 1,450 points will be the main support for now.

Malacca Securities Research

The FBM KLCI extended the pullback for the second session with further profit taking activities from the banking heavyweights.

Meanwhile, Wall Street ended positively after a sharp one-day pullback despite the US GDP (gross domestic product) being revised lower at 4.9% for 3Q 2023 while jobless claims came in at 205,000 vs estimates of 214,000.

Market will be watching the US Federal Reserve’s preferred PCE (Personal Consumption Expenditures) inflation report that will be released later tonight as at this juncture, the US dollar index headed lower with anticipation of a dovish stance from the US Fed next year.

Following the positive rebound on Wall Street, buying interest may return to the local exchange.

On the commodity markets, Brent crude prices steadied around the US$80/barrel as record US production and rising inventories offsetting the tensions in the Middle East, hence limiting the upside at this juncture.

The FBM KLCI ended sharply lower after briefly surpassing the 1,465 zone. The technical readings on the key index were mixed with the MACD Histogram forming a rounding top formation while the RSI maintains above the 50 level.

The resistance is envisaged around 1,470-1,480 while the support is set at 1,440-1,450. – Dec 22, 2023

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