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 eke-out minor gains to end the week on a positive note but still ended the day below the 1,420 level as fresh buying interest remains largely tepid due to the continuing lack of leads as market players await for the unveiling of Budget 2024.

Broader market conditions, however, were more positive as mild bargain hunting emerged to allow market breadth to return to the positive side.

Nevertheless, trades were still lower with last Friday’s total volume slipping below 3.0 billion shares.

With global market conditions dented by the flare-up of a new Middle East conflict, this fresh headwind could again dent market sentiments at the start of the week.

The increasingly cautious conditions could send market players back to the sidelines in what is seen as more of a wait and see stance.

At the same time, there are still few domestic leads that would also leave market conditions in an insipid mode for longer and ahead of the unveiling of Budget 2024 at the end of the week.

Still, we think that any market pullback could be relatively benign for the time being as the conflict is relatively contained and this could still see the FBM KLCI holding up for the most part.

Therefore, the key index could remain above the 1,410 support for now with the ensuing support pegged at 1,407 points and the next psychological support at the 1,400 level. On the other hand, the immediate hurdle is the 1,420 level, followed by 1,425 points.

Malacca Securities Research

The FBM KLCI is still consolidating along the 1,400-1,415 zone without significant buying support last week while Wall Street has ended higher following the US jobs data.

Despite the positive closing last week, we believe the overall situation could flip to the negative side given the rising geopolitical tension in the Middle East as the Israeli-Palestinian conflict may provide downside risk to global stock markets.

Nevertheless, we believe traders should focus on the domestic catalysts on the local front as we are approaching the Budget 2024 this Friday (Oct 13).

Commodities-wise, Brent crude spiked up more than 3% above the US$87/barrel level amid rising geopolitical risk while crude palm oil (CPO) prices are trading along the RM3,600/MT level.

The FBM KLCI ended marginally higher, hovering above the support zone of 1,400-1,415. The technical readings on the key index were positive with the MACD Histogram forming a rounding bottom formation, and the RSI threading in the oversold region.

The resistance is envisaged around 1,440-1,450 while the support is located around 1,400-1,415. – Oct 9, 2023

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