What to expect on Bursa Malaysia this Wednesday

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 managed to eke out minor gains yesterday to extend its upside for a second successive day, taking cue from the positives from gains in some key global indices.

However, conditions were still largely lacklustre due to thin buying interest with the cabinet reshuffling doing little to improve market sentiments.

Many lower liners indices also tipped higher even as market breadth turned negative for the day. Traded volumes, meanwhile, were lower than the previous day.

Although some key global equity markets were still registering fresh year highs, the FBM KLCI’s reaction has been relatively muted due to the continuing lack of buying interest.

As such, market conditions are likely to stay indifferent over the near term, hampered by lack of catalyst to spur the market interest.

For the most part, market players are still on the sidelines waiting for a clearer market direction before deciding on their next course of action.

Furthermore, market interest could also remain thin ahead of the upcoming year-end festivities that could leave the key index to drift and largely decouple from the upsides in the key global stock indices.

This could see the key index remaining within the 1,440 and 1,450 levels for the time being with the mild upside bias to continue as it looks to build up a base at the above levels. The other support and resistance levels are at 1,435 and 1,455 points respectively.

Malacca Securities Research

The FBM KLCI extended its rebound marginally higher, ending with a two-day winning streak supported by telco and construction sectors.

Over in the US, Wall Street maintained its upward tone, closing at 2023 fresh highs after inflation data came in within expectations at 3.1% year-on-year (yoy) (excluding food and energy costs rising at 4.0% yoy).

Since the expectation on the Consumer Price Index (CPI) will be on a downward projection, the market could position for a less hawkish tone by the US Federal Reserve. With that, we expect buying support to persist on the US and local stock exchange.

On the commodity markets, Brent crude prices retraced after hitting resistance along US$76-US$77/barrel amid demand concerns in China despite rising geopolitical tension after Iran-backed Yemeni militants attacked a tanker in the Red Sea.

The FBM KLCI ended flat by maintaining above the EMA60 level. The technical readings on the key index, however are still negative. The MACD Histogram extended a less negative bar while the RSI is hovering below the 50 level, albeit edging higher.

The resistance is envisaged around 1,460-1,465 while the support is set at 1,430-1,440. – Dec 13, 2023

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