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

Malaysian stocks were again weaker last Friday, slipping in line with the pullback among regional indices amid the threat of the escalation in the Middle East conflict and the US Federal Reserve’s hawkish monetary policies.

This sent most stocks lower as market players continue to retreat to the sidelines, particularly from foreign funds as the remain net sellers.

Most broader market shares also retreated amid the more subdued market conditions, resulting in market breadth trapped in the negative territory.

There is little change to the near-term market conditions which could remain unsettled in line with the uncertainties in most global indices.

Concerns over the global economic growth prospects, rising oil prices and the potential escalation in the Middle East conflict are likely to keep market players wary for longer.

There are also few noteworthy domestic leads for market players to follow. As a result, the key index could continue to drift further with the 1,440 level remains under threat.

Thus far, the 1440 support has held up but it if gives way, the 200-day moving average line at 1,437 points will become the next support, followed by the 1,435 level. On the upside, the resistances are pegged at 1,445 points and the psychological 1,450 points respectively.

Malacca Securities Research

The FBM KLCI was down in tandem with the regional stock markets sentiment. Meanwhile, Wall Street ended lower for the fourth session amid elevated US Treasury yields, coupled with the ongoing Middle East geopolitical tensions as well as hawkish US Fed’s outlook.

We believe all these negative catalysts could persist and limit the upside potential on the local front at least for the near term.

We expect the sentiment to remain weak without any emergence of fresh catalysts, and with traders positioning ahead of the earnings season next month.

Commodities-wise, Brent crude maintained around US$92/bsrrel on the back of the ongoing Middle East conflict while crude palm oil (CPO) traded slightly below RM3,800/metric tonne.

The FBM KLCI ended slightly lower but still maintaining above the 1,430 level. The technical readings on the key index were mixed with the MACD Histogram forming a rounding top formation but the RSI is hovering above 50.

The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 23, 2023

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