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 ended Wednesday (Jan 31) with superficial gains ahead of the Federal Territory Day holiday yesterday *Feb 1).

However, market conditions were mostly insipid as buying interest was thin with the key index trending in a tight range around the 1,510 level.

The broader market was also subdued with many stocks succumbing to further profit taking with the FBM Small Cap and FBM ACE market indices still languishing in the negative territory on thinner volumes.

Conditions on Bursa Malaysia are likely to remain subdued following the US Federal Reserve’s decision to keep interest rates elevated for longer.

At the same time, there are also fewer compelling buying opportunities among the index heavyweights after their recent gains have allowed many of these stocks to play catch up.

The recent upsides are also seeing many key index constituents reflecting their near-term fundamentals following their lagging performances in 2023.

Domestic impetuses are also few with market players eyeing the upcoming corporate results to be announced over the coming month for leads.

Consequently, the key index is likely to remain on a drifting note for now amid a still low selling pressure. The supports are at 1,508-1,510 levels and the psychological 1,500 level. The hurdles, meanwhile, are at 1,520 and 1,526 points respectively.

Malacca Securities Research

The FBM KLCI and FBM Small Cap pulled back for another session as profit taking activities kicked in prior to the Federal Territory holiday break.

Meanwhile, the US stock markets had a volatile move after the US Fed concluded the Federal Open Market Committee (FOMC) by keeping the interest rates unchanged, affirming that the interest rate is at its peak but commented that a March rate cut is unlikely.

Hence, the market is pricing in rate cuts that may happen in 2H 2024 by monitoring closely corporate earnings and employment report later today.

On the commodity markets, Brent crude fell below the US$80/barrel level as the market could be pricing in a ceasefire between Israel and Hamas.

The FBM KLCI ended flat. The technical readings on the key index were positive with the MACD Histogram extending a positive bar while the RSI maintains above the 50 level.

The resistance is envisaged around 1,520-1,530 while the support is set at 1,490-1,480. – Feb 2, 2024

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