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 mounted a rebound yesterday albeit the recovery was relatively benign due to the weak regional market sentiments where worries over China’s insipid economy and high global interest rates remained.

Nevertheless, the broader market was mixed as buying interest was still thin and profit taking was prevalent that resulted in total declining stocks well ahead of gainers for the day. Traded volumes, meanwhile, remained above the 3.0 billion shares level.

Near-term market conditions are likely to remain insipid due to the lack of leads as well as the weak market sentiments that are affecting global equities.

The cautious market undertone could also leave hopes of a meaningful window dressing to end 3Q 2023 in jeopardy as buying interest wanes and market players avoiding equities for the time being.

Not only would the weaker sentiments leave the key index to drift further but it could miss the window dressing altogether as the downside risk looks to dominate trades over the near term, particularly after the Dow tumbled overnight on renewed concerns over slowing economy.

Under the prevailing environment, the supports at 1,440 and 1,433 are still in play and could be re-tested again. The resistances, meanwhile, are at the 1,448-1,450 levels, followed by the 1,455 level.

Malacca Securities Research

The FBM KLCI had a slight rebound at the end of the session as bargain hunting activities resurfaced.

Meanwhile, Wall Street was significantly lower as investors were concerned that the elevated interest rate environment could dampen the economic outlook.

Also, the 10-year US Treasury yield climbed to a fresh 16-year high. With the August new home sales and US September consumer confidence index came in below estimates, we believe the overall market conditions may persist in the negative tone and likely to spill over to stocks on the local bourse.

Commodities-wise, Brent crude has rebounded to trade near the US$94/barrel level while crude palm oil (CPO) prices were trading near the RM3,700/metric tonne level.

The FBM KLCI ended higher but still hovering below the 1,450 psychological level. Also, the technical readings on the key index were negative with the MACD Histogram turning lower while the RSI stays below 50.

The resistance is located around 1,465-1,470 while the support is envisaged around 1,430-1,440. – Sept 27, 2023

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