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

Malaysian equities were on a purple patch yesterday, making strong strides to pass the 1,550 level with foreign funds taking dominating trades, brushing aside the country’s weaker-than-expected GDP (gross domestic product) and the depreciating ringgit.

Most Bursa Malaysia sector indices also gained ground, led by energy stocks on the continuing Red Sea crisis.

As a result, the broader market was positive with total gainers also ahead of losing ones. Traded volumes improved slightly with 3.7 billion shares changing hands.

Yesterday’s gains were a surprise, particularly with foreign funds taking up big market positions that pushed the key index to its highest level in nearly two years.

While encouraging, the strong run-up also resulted in the FBM KLCI’s technical indicators spreading into the overbought territory, hence a pullback could be imminent for the index to adjust from the overbought bout albeit there are no immediate signs for a consolidation as yet.

This means the key index could still extend its gains on rotational interest among the heavyweights to offset the prevailing market headwinds with the targets now lifted to 1,563 and 1,570 points respectively while the psychological 1,550 level is the immediate support, followed by 1,545 points.

Malacca Securities Research

The FBM KLCI ended higher for the third straight session with solid buying interest across most of the heavyweights.

Over in the US, Wall Street closed in the negative territory as technology stocks retreated, led by NVDA and AMD as investors turn cautious ahead of their earnings while defensive sectors such as consumer staples and utilities gained traction.

Closer to home, we believe the buying momentum should persist amid the ongoing earnings season as we anticipate better performance from the corporates in 4Q 2023.

On the commodity market, Brent crude price fell more than 1% on the back of worries about global demand, offsetting price support from the Middle East tensions.

The FBM KLCI traded significantly higher for the third session. The technical readings on the key index were positive with the MACD Histogram extending another positive bar while the RSI maintains above the 50 level.

The resistance is envisaged around 1,560-1,570 while the support is set at 1,520-1,530. – Feb 21, 2024

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