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 succumbed to quick profit taking activities yesterday, ending a two-day uptrend as foreign funds sold into strength to send it back to the 1,380 support.

Profit taking was also prevalent in the broader market, resulting in most Bursa Malaysia sector indices pulling back as well.

However, technology-related stocks remained upbeat to be among the top gainers for the day. Market breadth was mixed with losers just ahead of gainers for the day. Traded volume was also little changed at around 3 billion shares.

The FBM KLCI’s inability to sustain its upward streak is leaving its direction uncertain again and Malaysian stocks may continue to dither even as global equities are looking firmer.

As it is, foreign selling picked up pace again yesterday to end the positive streak and its sustained selling is likely to leave the key index to continue drifting for the time being as they still sell into strength.

This could dent the key index’s recovery prospects while also increasing the odds of a return to the downside.

Consequently, the 1,380 support level is still precarious and a break of the level could send the key index back to its year lows of 1,374-1,378 points. The hurdles, on the other hand, are at the 1,388-1,390 levels, followed by the 1,395 level.

Malacca Securities Research

The FBM KLCI reversed its previous session gains as investors took profit prior to the release of US consumer price index (CPI) data, bucking the positive performances across most of the regional markets.

Following the release of cooling inflation data at 4.0% year-on-year (yoy) in the US, investors may turn optimistic in expectation over a pause in US interest rate hikes by the US Federal Reserve and remain less hawkish for the rest of 2023.

Also, China’s recent broad stimulus measure may provide support towards the stock markets. Commodities-wise, Brent crude rebounded above US$74/barrel while crude palm oil (CPO) price hovered above RM3,400/metric tonne.

The FBM KLCI retreated to close below its daily EMA9 level, brushing off its gains in the previous session. Technical indicators turned fairly positive as the MACD Histogram extended a positive bar while the RSI has crossed above the 30 oversold level.

Support is monitored at 1,370 while the resistance is pegged along 1,400-1,440. – June 14, 2023

Subscribe and get top news delivered to your Inbox everyday for FREE