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 was lower yesterday amid the weakness in key overseas indices a day earlier as well as the weakening ringgit.

However, the key index’s retreat was relatively benign as it remains above the 1,440 level on some mild support.

Amid the few positivity, the broader market also slipped with the industrial products and services sector falling the most. This resulted in market breadth remaining negative for the day.

Market conditions are staying morbid, unable to gain much traction due to the combination of lack of domestic leads and the sagging global equity market that is leaving the equity market directionless for the time being.

As a consequence, the key index could continue to waver as market players could opt to close out their positions ahead of the weekend.

The selling could also be in response to the overnight sell-down on Wall Street following the US Federal Reserve’s prognosis that US inflation remains high, potentially indicating that interest rates may be raised again before end-2023.

Therefore, the 1,440-support level remains under threat and if the level breaks, the next support at 1,437 points – the 200-day moving average will come into the play. The resistances, meanwhile, are at 1,445-1,447 points and 1,450 points respectively.

Malacca Securities Research

The FBM KLCI was traded flat throughout the session but selling pressure was noticed among the small cap stocks albeit with a mild bargain hunting activities noticed.

With US Fed chairman Jerome Powell remained hawkish in its statement, the US stock markets traded negatively coupled with the rising US Treasury yield and worsening geopolitical tension in the Middle East which resulted in a spike in Brent crude prices.

Amid the more negative tone in the US stock markets overnight, we believe the overall market conditions on the local front may turn weaker, translating to a broad-based sell-down.

Commodities-wise, Brent crude had a big intraday swing from US$86/barrel to around US$93/barrel due to geopolitical tension in the Middle East while crude palm oil (CPO) traded fell below RM3,800/metric tonne.

The FBM KLCI ended slightly lower but still maintaining above the 1,430 level. The technical readings on the key index were mixed with the MACD Histogram forming a rounding top formation but the RSI is hovering above 50.

The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 20, 2023

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