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 lost further ground as it retreated again amid the resumption of foreign selling on selective index-linked stocks, extending the downtrend streak for a third straight day.

Market conditions were mostly listless even after Bank Negara Malaysia (BNM) left interest rates unchanged with most market players remaining on the sidelines that left the total traded volume little changed.

The lower liners also surrendered some of their gains on profit taking, hence resulting in market breadth turning negative.

There is little change to Bursa Malaysia’s near-term outlook as uncertainties over the upcoming state elections will continue to keep market conditions guarded – and could also prompt further profit taking – albeit the unchanged interest rate could provide some mild reprieve to leveraged companies.

At the same time, there are also few noteworthy corporate developments for market players to follow while global equities are on the tenterhooks again over prospects of further interest rate hikes in 2H 2023.

This means that the FBM KLCI is at risk of breaching the 1,385 level to end the week and could inch down towards the 1,380 support. Below that, the other support is at 1,377 points while the hurdles are at 1,390 and 1,395 points respectively.

Malacca Securities Research

The FBM KLCI failed to gain momentum despite BNM keeping the overnight policy rate (OPR) unchanged at 3.0%.

We reckon that the downward bias trading tone may linger over the foreseeable future as investors may keep their hands off until further clarity after the six states election on Aug 12.

Also, the resumption of selling activities from foreign funds and the weakness in ringgit against major currencies continues to dampen the trading interest.

On the global front, we reckon that the emergence of profit taking activities with sentiment turning weaker may see negative performances permeating towards the local markets.

Commodities-wise, Brent crude steadied above US$76/barrel while crude palm oil (CPO) price ticked slightly below RM3,900/metric tonne.

The FBM KLCI drifted further below EMA20 after hovering in the negative territory throughout the session yesterday. Technical indicators were mixed as the MACD Histogram formed another positive bar while the RSI hovered below 50.

The immediate resistances are envisaged along 1,413-1,430 while the support is pegged around 1,370. – July 7, 2023

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