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

Malaysian equities mounted a rebound yesterday with the key index recapturing not only the 200-day moving average line of 1,437 points, but also climbed above the 1,440 level at the close.

Much of the buying support came from local institutions as foreign funds remain net sellers with sentiments buoyed by the China’s new stimulus measures.

The broader market was also positive with total gainers outpacing losers but traded volumes were lower again and stayed below the 3.0 billion shares mark.

Yesterday’s upsides were welcomed as it allowed the key index to break its downward streak as well as to re-capture a critical market support level.

However, conditions could turn uncertain again following the overnight retreat on Wall Street that could leave conditions in a limbo with concerns over the weaker-than-expected corporate earnings performances back in focus.

Despite lingering uncertainties and quick profit taking emerging, the downsides could be measured as there could still be mild bargain hunting on some of the recently beaten down stocks, thus providing some support to the key index.

Therefore, the FBM KLCI could still linger close to the 1,440 level for the time being as it continues to find its footing from the recent sell-down even as the fresh buying interest is relatively benign.

The other support is at the 200-day moving average line while the hurdles are at 1,445 points and the psychological 1,450 level

Malacca Securities Research

The FBM KLCI rebounded, snapping a four-day losing streak while the buying support continues to be observed within the small cap and lower liners.

However, Wall Street reversed after the brief rebound move earlier this week following the earnings disappointment from Alphabet, coupled with the 10-year Treasury yield revisiting previous high.

Also, as investors are pricing in higher-for-longer interest rate environment, this may dampen the demand for equities.

Besides, the uncertainty in the Middle East may persist as Israel intensified its overnight bombing of southern Gaza, prompting Brent crude price to spike above US$90/barrel. Similarly, crude palm oil (CPO) traded closer to RM3,700/metric tonne.

The FBM KLCI ended higher, forming a flag formation breakout. The technical readings on the key index are slightly positive with the MACD Histogram turning flat while the RSI has hooked above 50.

The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 26, 2023

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