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 remains on the ascend, climbing past the 1,440 level to also re-test the 1,445 level albeit it closed a shade below the resistance level.

Foreign funds continue to make a beeline back to the key index stocks in what is seen as fresh bargain hunting ahead of the unveiling of Budget 2024 later today.

The broader market indices were also buoyed by the renewed buying interest which enabled market breadth to stay positive with traded volumes also picking up to nearly 3.4 billion shares for the day.

The recent recovery is encouraging as it allowed the key index to regain the bulk of its losses after the profit taking earlier in the month.

The rebound also saw the FBM KLCI climb back above the critical 200-day moving average – an indication that the uptrend will resume.

Notwithstanding the improved market trend recently, Budget 2024 could set the tone for Malaysian equity market’s direction over the near-to-medium term as the budget is seen as a critical blueprint in charting the country’s economic course and to address the various headwinds that the country faces.

Pending the unveiling of the Budget, however, we see the FBM KLCI largely on a holding pattern. The immediate resistance is at the 1,445-1,447 levels, followed by the 1,450 level. The supports, meanwhile, are at 1,440 and 1,437 points – the latter being the 200-day moving average line.

Malacca Securities Research

The FBM KLCI closed stronger for the fifth session prior to the Budget 2024. Meanwhile, the US stock markets ended in the negative territory, snapping a four-day winning streak as the US Treasury yield rose following the hotter-than-expected US CPI (consumer price index) data.

Investors could be pricing in a more hawkish environment from the US Federal Reserve and tighter-for-longer conditions on the monetary policies going forward.

Although selling pressure was seen on Wall Street, we believe buying interest may persist and traders may be positioning ahead of the Budget 2024 speech.

Commodities-wise, Brent crude traded along the US$86/barrel level while crude palm oil (CPO) closed higher above RM3,600/metric tonne as demand from China has improved recently.

The FBM KLCI ended higher, securing above the 1,430 level. The technical readings on the key index were more positive with the MACD Histogram extending another positive bar and the RSI breaking above 50.

The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 13, 2023

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