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

There were further upsides on Bursa Malaysia as bargain hunting on some of key heavyweights like banking and plantation stocks lifted the FBM KLCI to the 1,415 level.

In the process, it also bucked profit taking in many regional indices with local funds providing the support as foreign funds took profit on recent gains.

Although the key index headed higher, overall market conditions turned mixed with gainers just ahead of losers for the day with traded volumes falling slightly.

The market’s performance could turn choppier in the day ahead as profit taking may increase after its recent upside streak.

Follow-through buying activity is thinning as evidenced by yesterday’s mixed market conditions that is likely to extend due to the weak closing in key global indices overnight.

The jump in bond yields may hasten the selling on equities as inflation concerns return to the fore. The weakening ringgit could also renew foreign selling that could put a halt on the ongoing market rebound.

For now, however, there could still be some buying support with bouts of bargain hunting on sector leaders that have fallen significantly, potentially helping to keep the market’s retreat mild for the time being.

The supports are at 1,410 points and the psychological 1,400 level, while the resistances are at 1,420 and 1,428 points respectively.

Malacca Securities Research

Banking-led rallies kept the FBM KLCI above the key 1,400 level after the greater-than-expected special dividend by Affin Bank Bhd.

However, we opine that the rebound may remain fragile as investors may weigh potential global recession concerns over the recent reporting season on Wall Street as the spike in UK inflation spooked the markets.

Nevertheless, traders may look at companies with strong balance sheet to invest in the long run.

Commodities-wise, Brent crude price hovered above the US$90/barrel mark while crude palm oil (CPO) price surged above RM4,150/metric tonne on worries over the impact of tropical storms on palm oil production in East Malaysia and Kalimantan.

The FBM KLCI extended gains and surpassed its daily EMA20 level. Technical indicators are turning more positive as the MACD Histogram climbed above zero while the RSI moved towards 50.

Resistance is pegged along 1,420-1,430 while the support is set at 1,370-1,400. – Oct 20, 2022

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