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

There were more downsides on Bursa Malaysia with the FBM KLCI headed to another year low as the selling persisted ahead of the release of the US inflation data.

Except for the healthcare sector, other indices closed lower in tandem with the regional equity indices’ weakness as the market’s cautiousness remained.

The lower liner and broader market stocks were mixed but losers were still ahead of gaining stocks for the day.

With Malaysian equities languishing in the oversold position, there is now a chance for a long-awaited rebound to materialise as the market could take cue from the big jump in global equities overnight that cast aside the persistently high inflation data.

The rebound could largely be an adjustment from oversold conditions as the underlying global economic undertone remains challenging with more interest rate hikes a strong possibility as central banks remain committed to reining-in inflation.

Nevertheless, the overnight spike in overseas equities will provide the trading impetus for Malaysian equities to end the week on a positive note.

The immediate target is the 1,380 level, followed by the 1,390 and the psychological 1,400 levels. On the downside, the supports are pegged at 1,370 and 1,364 points respectively.

Malacca Securities Research

The FBM KLCI fell for another session as it struggled to find its footing amid broad-based sell-down prior to the US CPI data.

However, given that Wall Street rebounded strongly from its intraday low following the US CPI (consumer price index) print, we believe short-term bargain hunting activities may emerge on the local bourse and regional markets.

Nevertheless, as we think that inflation remains high and still far from the 2% inflation target of the Fed, the rebound can be short-lived.

Global investors should remain wary in anticipation of further interest rate hikes in the US.

Commodities-wise, Brent crude price regained momentum, trading above US$94 while crude palm oil (CPO) price hovered above RM3,700/metric tonne.

The FBM KLCI hit a fresh 52-week low, marking a fifth session of losses. Technical indicators implied signs of negative yet oversold as the MACD Histogram crossed below zero while the RSI hovered below the oversold 30 level.

Support is envisaged along 1,355-1,365 while the resistance is located at 1,400-1,430. – Oct 14, 2022

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