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

Stocks closed lower yesterday in tandem with the weakness on Wall Street the night before as profit taking came to the fore and bucking the region’s mostly positive trend.

However, the key index managed to recoup most of its intraday losses at the end the day.

Recent strong gainers like banking and plantation stocks were the day’s big losers with the lower liners and broader market shares also ended lower, resulting in market breadth in the losers’ favour. Traded volumes also slipped below 3.0 billion shares.

Despite yesterday’s retreat, the market undertone remains mildly positive, largely buoyed by the positivity in global equities that are still permeating to stocks on Bursa Malaysia even as there is cautiousness ahead of the weekend’s state elections.

As it is, foreign funds are still providing most of the buying support, cushioning the selling by domestic market players.

With global equities still riding high on the easing inflationary concerns, the positivity should also extend to the FBM KLCI and help it to mount a quick recovery to help it end the week on an improved note.

Still, we think the upside may be modest as domestic players may continue to stay on the sidelines for now and this could leave the immediate hurdles at 1,462 – the recent high – and 1,465 points, in play. The supports remain at the 1,455 level and the psychological 1,450 level.

Malacca Securities Research

With China slipping into the deflationary mode last month, the FBM KLCI was pressured lower before quick bargain hunting activities which cushioned the downside move yesterday.

As we approach the Malaysia state elections over the weekend, we expect trading activities to remain cautious. Lower liners may also set for a range-bound trading with the on-going corporate reporting season.

Given that the US inflation has moderated, we reckon that Wall Street may head higher over the near term.

Going forward, investors will be monitoring the outcome of Malaysia state elections as well as the US producer price index data to be released tonight.

Commodities-wise, Brent crude staged a pullback below US$87/barrel while crude palm oil (CPO) prices hovered above RM3,700/metric tonne.

The FBM KLCI managed to recover from its intraday low to close slightly lower as the key index and formed a hammer candle yesterday. Technical indicators remained mixed as the MACD Histogram extended another negative bar while the RSI came off from the overbought territory.

The immediate resistances are located along 1,480-1,500 while the support is pegged around 1,420-1,440. – Aug 11, 2023

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