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 regained some ground in yesterday’s trade with the return of mild bargain hunting that allowed it to absorb the continuing foreign selling.

This also allowed most Bursa indices to return to the green side with technology stocks again the main movers.

Conditions in the broader market were also more upbeat as this allowed market breadth to also return to the positive side. However, market interest thinned slightly as it fell below the 3 billion shares mark.

Despite yesterday’s recovery, we still see market conditions staying unsettled as buying interest is still mostly tepid with the FBM KLCI remaining vulnerable to further downsides due to the persistent selling by foreign funds.

This is despite attractive market valuations whereby both the FBM KLCI and FBM EMAS indices are trading below their historical long-term forward averages.

Market sentiments, although improved marginally, have also yet to entice market players to stay invested in Malaysian equities and this is likely to keep the FBM KLCI on a leash for longer.

In the near-term, the key index is likely to stay listless and could trend within a narrow range as it looks to find some solace from the recent sell-down.

This could also see the return of the holding pattern ahead of the mid-year closing. On the upside, the hurdles are at 1,387-1,390 points, followed by the 1,395 level. The supports, meanwhile, are at 1,380-1,383 levels and at 1,375 points.

Malacca Securities Research

The FBM KLCI tracked the positive performance on Wall Street in anticipation of a halt in the interest rate hikes following the release of a larger-than-expected drop in the US inflation data.

However, volatility surged on Wall Street as the US Federal Reserve signalled two more potential rate hikes in 2023.

Meanwhile, the local bourse may see selling pressure on interest rate sensitive sectors such as the technology sector.

Commodities-wise, Brent crude price saw a pullback towards US$73/barrel while crude palm oil (CPO) price hovered above RM3,450/metric tonne.

The FBM KLCI ended on an upbeat note as the key index rose above its daily EMA9. Technical indicators remained mixed as the MACD Histogram extended a positive bar while the RSI hover below 50.

Resistance is set along 1,400-1,410 while the support is monitored at 1,370. – June 15, 2023

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