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 underwent a pullback yesterday in tune with the weaker conditions among regional indices after their recent gains.

The FBM KLCI’s pullback was also relatively mild with the continuing buying support from foreign funds helping to cast aside the still weak IPI (Industrial Production Index) reading.

The weakness also extended to the lower liners as they also succumbed to profit taking with market breadth having turned negative. Traded volumes also fell but remained above 3.0 billion shares for the day.

Despite yesterday’s pullback, the market’s undertone appears firm as the key index remains near the “make or break” level of 1,465 points, suggesting that there is still buying support that could help to preserve its near-term upward trend.

The continuing gains on Wall Street would also help to keep the upside momentum on Malaysian equities even as there are still few available domestic leads to keep market players interested.

As such, we think the key index could continue to tether close to the 1,465 level for the time being but make little headway as market players continue to assess the near-term outlook, particularly as the corporate results reporting season has arrived.

On the upside, the resistances are at 1,470 and 1,475 points while the supports are at 1,460 and 1,457 points respectively.

Malacca Securities Research

The FBM KLCI took a mild breather, snapping a three-day rally as profit taking emerged within selected index heavyweights.

Meanwhile, Wall Street extended its winning streak led by technology giants with NASDAQ up by more than 8% from the recent low.

The US 10-year Treasury yield was easing following comments from several US Federal Reserve’s officials, suggesting that the central bank might be near the end of the tightening cycle.

Given the earnings by US corporates are still in a good shape, investors could have brushed aside the earnings recession narrative.

On the commodity markets, Brent crude prices tanked more than 4% amid softer demand concerns despite the on-going conflict in the Middle East.

The FBM KLCI ended flat, consolidating sideways after the recent flag breakout formation. The technical readings on the key index are positive with the MACD Histogram extending another positive bar while the RSI maintains above 50.

The resistance is pegged around 1,470-1,480 while the support is at 1,440-1,450. – Nov 8, 2023

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