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

Stocks retreated on Tuesday (Jan 31), following the lead of regional indices that slipped in tandem with the weakness on Wall Street a day earlier.

The retreat was also pronounced with all Bursa sector indices ending the day lower that resulted in losers nearly doubled that of gainers for the day.

Expectedly, the broader market and lower liners also retreated, but their consolidation was relatively benign and was mostly on profit taking from the recent strong gains.

Once again, the 1,500 points level is proving to be a formidable hurdle with the key index left at the crossroads again.

Consequently, the key index could dither once again after the steady upsides it made in the past month has become undone and may take longer to regain its traction.

Nevertheless, mild bargain hunting may emerge over the near-term after Tuesday’s pullback in tune with the gains on Wall Street overnight.

This could allow the key index to find some stability albeit a strong rebound is not expected as interest on the index heavyweights are still relatively mild due to the absence of substantive leads.

As such, we think the key index could retest the 1,490 level, with the ensuing hurdles pegged at 1,494 and the psychological 1,500 level. The supports, on the other hand, are at 1,480 and 1,474 points respectively.

Malacca Securities Research

The FBM KLCI took a breather before heading into the Federal Territory Day holiday as investors stayed cautious prior to the US Federal Reserve’s Federal Open Market Committee (FOMC) meeting.

Meanwhile, the quarter-point rate hike from the Fed which is within the market’s expectation has reversed the negative mood on Wall Street, enabling most US stocks  to close in the positive zone and suggesting that the market has priced in the interest rate impact as well as acknowledging that inflationary pressure has been easing.

Hence, we believe the positive sentiment on both Wall Street and the regional markets will spill over to the local bourse.

Commodities-wise, Brent crude traded around US$82/barrel while crude palm oil (CPO) price fell to near the RM3,800/metric tonne level.

The FBM KLCI retreated, closing below its daily EMA20 and just above the SMA200 level. Technical indicators remained mixed as the MACD Histogram extended a negative bar while the RSI is hovering above 50.

Support is located at 1,450-1,460 while the resistance is set around 1,525-1,540. – Feb 2, 2023

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