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 mounted a recovery yesterday after the steep falls over the past few sessions that left it technically oversold.

In the process, the key index also managed to climb back above the psychological 1,400 level at the close on bargain hunting activities, particularly among the lower liners and broader market shares that resulted in total gainers outpacing losers on a 2-to-1 ratio.

All Bursa Malaysia sector indices registered gains with healthcare stocks being the biggest gainers for the day.

Although yesterday’s recovery is welcomed to break the downward spell, it remains to be seen if the recovery could sustain as the broad market environment is still one of cautiousness.

The banking crisis has spread to Europe as a few European banks have run into financial difficulties, hence could leave market players on the tenterhooks for longer even as the risk of a contagion effect on Malaysian banks are low at this juncture.

Therefore, the FBM KLCI is again at the crossroads as they weigh the impact of the latest developments and may opt to reduce their exposure for the time being, particularly as key global equity indices have pulled back again overnight on the lingering banking concerns.

This also means that the 1,400 level is under threat again and if it is breached, the supports will be pegged at the 1,390-1,393 levels. The hurdles, meanwhile, are at 1,410 and 1,415 points respectively.

Malacca Securities Research

The FBM KLCI bounced higher to close above the key 1,400 level as investors picked up beaten-down stocks on the broader market.

However, global uncertainties may not abate with the Wall Street turning mixed once again on the back of revived fears of a banking crisis; Credit Suisse is making the headlines after the Saudi National Bank mentioned that it will not provide further financial help for the bank.

Thus, the local bourse may trade in consolidation mode prior to the US interest rate decision next week. Commodities-wise, Brent crude fell steeply below the US$75/barrel zone while crude palm oil (CPO) price declined below the RM3,900/metric tonne level.

The FBM KLCI rebounded, snapping its five-session losing streak as the key index closed above the key 1,400 level. Technical indicators, however remained negative as the MACD Histogram extended a negative bar while the RSI is in the oversold zone.

Resistance is set along 1,420-1,440 while the support is at 1,380-1,400. – March 16, 2023

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