What to expect on Bursa Malaysia this Monday

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 managed to end the week on a positive note last Friday on the back of mild bargain hunting activities.

However, it was a choppy session with the key index oscillating between the positive and negative territories for much of the day.

Part of the positivity was boosted by gains in regional indices that also helped the lower liners and broader market shares to garner decent gains and market breadth to turn positive.

Market interest also rose as total volumes climbed back to above 3 billion shares.

We think the key index could attempt to build on the gains it attained last Friday, riding on the back of the more positive performance of global equities that is banking on the US Federal Reserve slowing or ending its interest rate hikes in the upcoming months.

However, the upsides could also be tempered by the lack of domestic catalysts that could still slow the near-term recovery prospects and leave the key index to drift further.

At the same time, foreign funds are still disposing of their shareholdings and this could also slow the recovery process.

Therefore, the 1,380 level looks to be still a formidable level to clear for the time being as there is continuing cautiousness over the FBM KLCI’s direction. Further above, the ensuing hurdle is set at 1,386 points while the supports are at 1,376 and 1,369 points respectively.

Malacca Securities Research

The FBM KLCI edged higher, buoyed by selected PETRONAS-related, telecommunications and banking heavyweights.

Ahead of the US Fed’s Federal Open Market Committee (FOMC) and the US consumer price index (CPI) data, regional markets and Wall Street were largely trading in the positive territory, anticipating that the US Fed could be keeping the interest rates at current level in view of the softening US CPI print.

We believe the gains last week may continue to spill over to our local bourse but gains might be capped ahead of the six states elections.

Commodities-wise, Brent crude traded above US$74/barrel while crude palm oil (CPO) price hovered above RM3,350/metric tonne.

The FBM KLCI rebounded and booked marginal gains following a two-day decline. Technical indicators however, remained negative as the MACD Histogram extended a negative bar while the RSI hovered below the oversold 30 level.

The next resistance is pegged along 1,400-1,440 while the support is located around 1,370. – June 12, 2023

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