What to expect on Bursa Malaysia this Thursday

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 continues to lose ground yesterday but managed to stay above the 1,490 support at the close.

Overall market sentiments remained weak as stocks on Bursa Malaysia mirrored the performance or regional indices that reacted negatively to China’s slightly below expectation 2023 GDP (gross domestic product).

Once again, the broader market was mired by intense selling, spooked by limit down on some lower liners. Losers outpaced gainers on a 3-to-1 ratio with volumes staying above 5.0 billion shares for the day.

Market conditions are likely to stay insipid in the day ahead as conditions are becoming more cautious after the key index slipped below the 1,500 level, suggesting that there is little buying interest above that level.

However, the FBM KLCI is still largely holding despite the sharp pullback among the broader market shares.

As it is, sentiments are turning weaker due to the mostly directionless trend among global equities that are also succumbing to increased profit taking after their strong end to 2023.

Hopes for a more meaningful interest rate cut are also diminishing after the latest inflation reading suggest that prices are likely to remain elevated for a longer duration.

Therefore, the FBM KLCI’s consolidation is expected to persist with the 1,490-level serving as the immediate support. If this level gives way, the ensuing supports are at the 1,483-1,487 levels.

On the flipside, the hurdles are at the 1,498-1,500 levels, followed by the recent high closing of 1,501 points.

Malacca Securities Research

The FBM KLCI traded lower for the second session as the market sentiment remains negative as we believe margin calls were activated after several companies hit limit-down conditions.

For the upcoming session, we believe the negative sentiment could persist on the fundamentally weak companies but bargain hunting activities will be seen in solid companies.

Over at Wall Street, the three major indexes ended lower following a spike in US Treasury yield after a stronger-than-expected retail sale report.

This has contributed to lower probability of the US Federal Reserve cutting its key policy rate in March from 66% to 56% based on Bloomberg.

On the commodity markets, Brent crude price traded marginally higher around US$78/barrel despite weak China data.

The FBM KLCI ended lower for the second consecutive days. The technical readings on the key index were however mixed with the MACD Histogram extending another negative bar while the RSI maintains above the 50 level.

The resistance is envisaged around 1,510-1,520 while the support is set at 1,470-1,480. – Jan 18, 2024

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