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 key index flopped again yesterday as sentiments turned cautious in tune with the regional market’s insipid performances.

At the same time, the FBM KLCI was also in a wait-and-see stance ahead of the US interest rate decision albeit the benchmark index still managed to stay above the psychological 1,450 support.

In the broader market, however, trading activities were still relative brisk, allowing for market breadth to stay positive despite traded volumes were some 10% lower than the previous session.

Although the US Federal Reserve kept its interest rates unchanged, global equity markets reacted negatively to its hint of keeping interest rates high for a prolonged period to combat inflation that could also permeate to stocks on Bursa Malaysia.

As such, the near-term outlook has become more precarious, with selling pressure expected to persist over the near term that could see the 1,450 support remain under threat.

A break of the psychological level would not only undo its sideway trend and base building efforts but also leave sentiment increasingly cautious that may prolong the weakness spell.

Below the 1,450 level, there is a minor support at 1,447 points, followed by the 1,443 level. The hurdles are at 1,455 points and at the 1,460 level respectively.

Malacca Securities Research

The FBM KLCI has ended lower for the third trading day prior to the Federal Open Market Committee (FOMC) meeting.

Given the tone from the US Fed has turned mildly hawkish – signalling that the Fed may potentially hike the interest rates in the next few meetings – the market is likely to take it negatively with selling pressure to persist.

Nevertheless, we believe thematic buying support should pick up on the back of domestic driven catalysts such as the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP 2030) blueprints.

Commodities-wise, Brent crude has continued to retrace from the recent high and is currently trading below the US$94/barrel level while crude palm oil (CPO) prices are still range-bound along the RM3,700-RM3,800/metric tonne level.

The FBM KLCI ended lower while maintaining above the 1,450 psychological level. Also, the technical readings on the key index were mixed. The MACD Histogram has extended another positive bar while the RSI dropped below 50.

The resistance is located around 1,465-1,470 while the support is envisaged around 1,430-1,440. – Sept 21, 2023

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