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 ended 3Q 2023 on a whimper as steeper profit taking emerged to cut its quarterly gains to 3.5% albeit trimming its year-to-date (YTD) losses to 4.8%.

Much of Friday’s selling were on banking and telco stocks – the former was among the big gainers during the quarter.

The broader market was also broadly lower due to the sustained profit taking after many of these stocks saw strong recovery during the quarter on the return of trading activities.

After last Friday’s steep retreat that resulted in the key index slipping below its critical support levels, the near-term outlook has also turned increasingly dour as its recent base-building efforts have come to naught.

Market sentiments have also turned uncertain which could leave the key index to drift again, possibly surrendering more of the gains it attained in 3Q 2023.

While bargain hunting may still emerge after Friday’s steep falls, any recovery looks meek for the time being as the overall market conditions are likely to remain insipid as market players could still be scouring for new pointers before taking up new positions, thus leaving Malaysian equities to face a slow start to the final quarter of the year.

Due to the continuing listless trend, the supports are now pegged at the 1,420 level, followed by the 1,413 level. On the upside, the resistances are at 1,425 and 1,430 points respectively.

Malacca Securities Research

The FBM KLCI has declined significantly lower on the final day of the September month amid selling pressure in the banking heavyweights.

Meanwhile, Wall Street traded mixed prior to the passing of a short-term bill just three hours before the deadline, hence averting a US government shutdown for another 45 days.

We therefore expect the overall stock markets to head higher at least for the near term. Closer to home, we opine that the positive developments within the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP 2030) blueprints as well as the upcoming Budget 2024 may provide trading opportunities on the local exchange.

Commodities-wise, Brent crude traded below the US$93/barrel level while crude palm oil (CPO) prices revisited above the RM3,800/metric tonne level before forming an inverted hammer below RM3,800.

The FBM KLCI ended lower and breached below the previous support zone of 1,430-1,440. Also, the technical readings on the key index were negative with the MACD Histogram extended another negative bar while the RSI is nearing 30.

The resistance is located around 1,450-1,460 with the support located around 1,400-1,420. – Oct 2, 2023

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