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 ground again yesterday but found support at the 1,440 level in yet another lacklustre day where market sentiments were sapped by weak overseas equity market performances that were still weighted down by concerns over the state of the global economic conditions.

However, the broader market was mixed amid an increase in trading interest that saw market volumes tipping higher and past the 3.0 billion shares mark again.

Market conditions are still unsettled with few positive leads and the downside bias remains in place for the time being.

Overall market conditions are in a consolidation mode with few impetuses to provide the lift to the market.

With key overseas equity indices still displaying weakness, the downside bias could persist with foreign funds likely to continue their selling due to the combination of the weaker ringgit and the flight to safer assets.

Therefore, the key index is still vulnerable to more near-term weakness with the 200-day moving average support at 1,437 points remains under threat albeit mild buying support may help to limit the near-term downside.

Below 1,437, the other supports are at the 1,430-1,434 levels. The hurdles, meanwhile, are at the 1,445 and 1,450 levels respectively.

Malacca Securities Research

The FBM KLCI ended softer in tandem with the weaker regional sentiment. Also, weaker-than-expected results from US corporations were contributing to the softer Wall Street movements.

We expect the sentiment to stay negative at this juncture given the stronger GDP (gross domestic product) data where investors may price in a higher-for-longer interest rate environment which may dampen the appetite for stock markets.

Selling may even spill over to the local front, limiting the upside potential on Bursa Malaysia. On the oil market, the Energy Information Administration (EIA) reported that US oil inventories rose by 1.4 million barrels last week, suggesting lighter-than-expected demand, thus prompted Brent crude price to fall below US$88/barrel.

The FBM KLCI ended slightly lower, forming a flag formation breakout. The technical readings on the key index are slightly positive with the MACD Histogram turning flat while the RSI maintains above 50.

The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 27, 2023

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