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

Despite lingering in the positive territory for much of the day, the FBM KLCI ended lower as profit taking escalated towards the end of the day to leave the key index in the negative territory for a second consecutive day.

However, most Bursa Malaysia sector indices were higher with the plantation index being the day’s biggest gainer.

This helped market breadth to remain on the positive side as many lower liners also sustained their upsides although much of the gains were on relatively low volumes.

We continue to think that the key index is likely to be mostly range-bound for the time being, unable to gain sufficient traction to make significant up-moves due to the lack of catalyst and investor’s wariness over the upcoming state elections.

The insipid conditions among key global and regional indices would also leave the key index to continue drifting for longer.

Market players would be on the lookout for Bank Negara Malaysia’s (BNM) interest rate decision later today where the consensus estimate is for the OPR (overnight policy rate) to remain unchanged.

Under the prevailing environment, the FBM KLCI is likely to linger within the 1,385 and 1,395 levels with the interim support pegged at 1,387 points while the other resistance is at 1,393 points.

Malacca Securities Research

The FBM KLCI took another step back amid the absence of fresh leads as Wall Street was closed.

Despite the key index’s rebound momentum appearing to be having a pause, the lower liners trended higher on the back of the extended rotational play following the better market sentiment.

However, with the US Federal Reserve skewing towards a more hawkish narrative, investors will now keep a close tab on the central bank’s OPR decision today.

Given that inflationary pressures remain sticky and domestic economic growth is on track, we believe that the door for further rate hikes will remain open for most of the central Banks.

Commodities-wise, Brent crude steadied above US$76/barrel while crude palm oil (CPO) price hovered towards RM3,900/metric tonne.

The FBM KLCI retreated to close below EMA20 after reversing all its intraday gains. Technical indicators have turned weaker as the MACD Histogram formed a negative bar while the RSI hovered below 50.

The immediate resistances are envisaged along 1,413-1,430 while the support is pegged around 1,370. – July 7, 2023

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