FBM KLCI to test 1,680 next week

KUALA LUMPUR: Bursa Malaysia is expected to trend higher next week with the FBM KLCI to hit the 1,680 level on better sentiment as the ringgit improves against the US dollar.
Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said sentiment was expected to improve prior to Donald Trump's inauguration Friday as US President as his speech was expected to provide more details on his government's policies, including economic policy.
He said recent decisions by the European Central Bank to maintain its interest rate, as well as optimism from the Japanese central bank and Bank Negara Malaysia on their respective country's economic growth would also help to improve sentiment.
"The fundamentals are there, it's just the sentiment that keeps the local stock market subdued this week," he told Bernama.
Nevertheless, he said the market bellwether FTSE Bursa Malaysia KLCI (FBM KLCI) had improved 30 points or 1.8% this month, a good indication for the rest of the year.
He added that the support level for next week was seen at 1,660 and the resistance level at 1,680.
For the week just-ended, the local index trended mostly lower, dominated by cautious sentiment on the US policy after Trump assumes office.
On a week-to-week basis, the FBM KLCI fell 7.61 points to 1,664.89 from 1,672.5 last Friday.
The FBM Emas Index shed 42.76 points to 11,668.55, FBMT 100 Index decreased 43.15 points to 11,372.54, FBM Ace fell 101.37 points to 4,985.8 and the FBM 70 declined 16.74 points to 13,346.94.
The FBM Emas Syariah Index was 78.87 points weaker at 12,157.94.
On a sectoral basis, the Finance Index eased 38.78 points to 14,707.21, the Plantation Index erased 21.94 points to 7,915.12 and the Industrial Index declined 44.55 points to 3,125.53.
Weekly turnover fell to 9.1 billion units worth RM8.25 billion from 11.99 billion units worth RM9.69 billion last Friday.
Main market volume narrowed to 6.08 billion shares valued at RM7.74 billion from 7.99 billion shares valued at RM8.98 billion previously.
Warrant turnover shrank to 766.61 million units worth RM116.42 million from 866.07 million units worth RM142.42 million last Friday.
The ACE market decreased to 2.23 billion shares worth RM392.53 million from 3.11 billion shares worth RM562.63 million last week.
Gold futures contract on Bursa Malaysia Derivatives are expected to trend higher next week, tracking the US Commodity Exchange's gold futures market, said a dealer.
Phillip Futures Sdn Bhd Dealer, Viola Wong, said the weakness in the ringgit was expected to be the key factor to lift the demand for gold.
"Ringgit is expected to trend lower on the back of a stronger US dollar next week after the US President Donald Trump's inauguration on Friday.
"This will continue to boost foreign demand as well and provide support to the gold price, as the ringgit-based gold becomes cheaper to foreign buyers," Wong told Bernama.
On a Friday-to-Friday basis, January 2017 slid three ticks to RM170.75 a gramme and February 2017 lost five ticks to RM171 a gramme.
March 2017, April 2017 and June 2017 fell 12 ticks each to RM171.45, RM171.5 and RM172.65 a gramme, respectively.
Weekly turnover increased to 62 lots worth RM1.07 million from 56 lots worth RM964,400 recorded last week.
Open interest on Friday was higher at 263 contracts from 233 contracts previously. — Bernama