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 ended the day lower again and surrendering the gains it attained a day earlier as market players await for the US Federal Reserve’s interest rate decision.

That Russia was ratchetting up its plans with regard to its invasion of Ukraine also dampened sentiments. However, energy and transport stocks bucked the selling trend to close higher.

Although many broader market stocks also slipped, their decline was more measured. Nevertheless, losing stocks still outnumbered gaining ones for the day.

The downside pressure looks to prevail for much longer following the Fed’s interest rate hike that may keep market sentiment on the slide again.

While the 75 basis points (bps) hike was within expectations, the Fed’s reiteration that interest rates could be raised further is set to leave market players wary for longer and this is likely to leave the Malaysian equity market to drift lower over the near term.

The higher rates could also force Bank Negara Malaysia (BNM) to also lift domestic rates that may also slow the Malaysian economic recovery.

With the key index already below the 1,450 level, the supports are now lowered to the 1,440-1,442 levels, followed by the 1,438 level. On the flipside, the immediate resistance is the 1,450 level, followed by 1,461 level.

Malacca Securities Research

The FBM KLCI slumped, taking cues from the global stock markets prior to the US Federal Open Market Committee (FOMC) meeting.

As investors digested the 75 bps interest rate hikes and the US Fed’s signals more hawkish tone into end-2022, global sentiment should remain tepid at least over the near term.

Nevertheless, bargain hunting activities may emerge in selected sectors as traders may shift their focus to the Budget 2023 beneficiaries.

Commodities-wise, Brent crude price breached below the US$90/barrel mark while crude palm oil (CPO) price hovered above RM3,800/metric tonne.

The FBM KLCI reversed its intraday gains to close in the negative territory. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI hovered below the 50 level.

Resistance is envisaged along 1,465-1,485 while the support is monitored at 1,430, followed by 1,410. – Sept 22, 2022

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