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 stocks made a strong comeback yesterday, recovering more than 1.0% after the recent sell-down to push pass the 1,430 level at the close and casting aside the new Middle East conflict.

The gains were also in tandem with the uptick in regional indices with banking stocks being the main gainers.

The broader market shares also made strong headway by helping market breadth to return to the positive side. There was also a return of foreign funds with total volumes climbing above 3.0 billion sharees again.

Yesterday’s rebound was a welcomed surprise with the market expecting the conflict to have little-to- no lasting impact on the global economy, prompting fresh bargain hunting on the recent big losers.

The recovery, however, may have been too steep and this may prompt quick profit taking at the start of session albeit we think there could be more near-term recovery in tandem with the gains in major global stocks indices overnight.

Nevertheless, the broad market conditions are still relatively unsettled due to the prevailing concerns over a prolonged high interest rate environment which may limit further gains with the resistances now pegged at 1,440 points and 1,445 points respectively.

The supports, on the other hand, are at 1,428 points and 1,424 points respectively.

Malacca Securities Research

The FBM KLCI closed higher for the session, following a more dovish comment from the Fed as well as China preparing a new round of measures to support the economy.

Traders were brushing off the on-going geopolitical tension and focusing on the upcoming inflation data in the US.

It is likely that the buying interest should persist on the local front ahead of the upcoming Budget 2024 as we expect the positive local catalyst to support the overall market’s conditions at least for the near to mid-term.

Commodities-wise, Brent crude took a breather but still traded above the US$87/barrel level amid ongoing geopolitical concerns while the crude palm oil (CPO) closed below the RM3,600/metric tonne level after palm oil inventory increased 9.6% month-on-month (mom) to 2.31 million tonnes.

The FBM KLCI ended significantly higher, hovering above the support zone of 1,400-1,415. The technical readings on the key index were positive with the MACD Histogram forming a rounding bottom formation and the RSI rebounded to approach 50.

The resistance is envisaged around 1,440-1,450 while the support is located around 1,400-1,415. – Oct 11, 2023

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