Inter-Pacific Research
The FBM KLCI was little changed on Friday as Budget 2024 was unveiled by the Prime Minister in what was seen as a largely neutral Budget with few giveaways.
For most of the day, the key index was slightly negative but managed to claw back its losses towards the end of the session on mild bargain hunting.
The broader market, however, was mostly lower as they tracked the weakness of regional indices with market breadth in the negative territory for the day.
With few impetuses from Budget 2024, the FBM KLCI is likely to trend within a tight range for the time being as it looks to fortify its position above the 1,440 level.
As it is, there were few giveaways in Budget 2024 with the emphasis on prioritising spending needs and to rein-in subsidies.
However, the key index may also start the week on a slightly negative note as market players could opt to align their portfolios in light of the introduction of new taxes and take some profit after the last week’s gains.
Still, the downside should be relatively benign as there is little selling pressure for now and this should allow the key index to preserve most of the gains from last week’s recovery.
For now, the support is at the 1,440-1,443 levels which is followed by the 200-day moving average line at 1,437 points. The resistances, meanwhile, are at the psychological 1,450 level with the ensuing hurdle set at 1,455 points.
Malacca Securities Research
The FBM KLCI closed higher for the sixth session prior to the Budget 2024 as investors were anticipating positive catalysts from the event.
However, the US stock markets pulled back amid rising geopolitical tension offsetting the stronger-than-expected quarterly earnings from the banking heavyweights.
Given the growing geopolitical uncertainty in the Middle East region, we believe the upside could be limited on the local front.
Nevertheless, the traders may focus on the Budget 2024 which may provide trading catalysts at least for the near term.
Commodities-wise, Brent crude surged strongly above US$90/barrel after the Middle East tension intensified while crude palm oil (CPO) closed above RM3,700/metric tonne with the improved China demand.
The FBM KLCI ended flat but maintained above the 1,430 level. The technical readings on the key index were more positive with the MACD Histogram extending another positive ba while the RSI is hovering above 50.
The resistance is envisaged around 1,450-1,460 with the support located around 1,420-1,430. – Oct 16, 2023
