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 key index rebounded yesterday but managed only superficial gains at the end of the day.

For the most part, the FBM KLCI was on a holding pattern, trending within a narrow band as there were few leads to encourage stronger participation with only selected index heavyweights providing the lift.

Nevertheless, broader market shares also recovered but the gains were also relatively benign. Still, market breadth turned positive even as traded volumes continued to thin to just over 3 billion shares.

The near-term market conditions are likely to stay relatively indifferent ahead of the upcoming Chinese New Year long weekend.

Market interest could thin further as well due to the lack of catalyst that could also leave market players on the sidelines for longer.

Sentiments are still deterred by the US Federal Reserve’s likelihood in keeping interest rates elevated and this could still result in Malaysian equities staying less followed.

Additionally, there are also few impetuses from foreign markets due to the prolonged high interest rate environment.

As such, the holding pattern is likely to persist for now with the supports to remain around the 1,508-1,510 levels with the psychological 1,500 level providing the ensuing support. The hurdles, meanwhile, are at the 1,520 and 1,526 levels respectively.

Malacca Securities Research

The FBM KLCI continued to trade within a range-bound manner ahead of the Chinese New Year long weekend break.

Meanwhile, Wall Street managed to gain momentum as the US Treasury yields slipped with investors pushing back the expectation of the US Fed’s first rate cut by 2H 2024.

On the Chinese stocks, we noticed a significant rebound after Beijing ramped up efforts to put a stall in the falling China and Hong Kong stock markets.

With the rebound in global as well as China and Hong Kong stock markets, we believe buying support may emerge this week on our local stock exchange.

On the commodity markets, Brent crude inched higher as EIA expects oil inventories to fall in the current quarter on reduced productions from OPEC+ and the US.

The FBM KLCI ended higher but still hovering within the consolidation phase. The technical readings on the key index were mixed with the MACD Histogram turned negative while the RSI maintains above the 50 level.

The resistance is envisaged around 1,520-1,530 while the support is set at 1,490-1,480. – Feb 7, 2024

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