KUALA LUMPUR: Following Wall Street’s positive performance after the recent interest rate cut and with the resumption of the US-China face-to-face talks, the FTSE Bursa Malaysia (FBM KLCI) is expected to rise above the 1,600 level next week.
Philip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan said local stocks should head for stronger gains after a series of central bank decisions hinted at prospective new easing measures and oil prices moved higher as the market weighed the disruption to production in Saudi Arabia.
He said on the technical front, the overall technical landscape showed that the FBM KLCI was still in the process of recovering above the 1,600-point threshold.
“Although the local bourse has dipped slightly below this level, we make no change to our view that the momentum is accumulating.
“From our technical perspective, the aforementioned threshold could be a bottom for the index. This is especially after multiple appearances of a positive indicator at the multi-month low, which suggests that the bulls are taking control from the bears,” he told Bernama.
He noted that there was also positive divergence detected in May – an indication that the recent trend was nearing its limit and the market was expected to see a fresh uptrend in the near term.
“Looking forward, it’s set to see a solid rebound and we maintain our strong support between 1,600 and 1,572 points, while the immediate resistance is seen at 1,660 points followed by the 1,700-point psychological mark,” he said.
Meanwhile, Nazri Khan said he expected the shortfall in oil supply following the attacks on Saudi oil facilities last weekend and escalating tensions in the Middle East would benefit the local oil and gas sector despite the Saudi government’s previous statement that the supply was sustainable.
“Given the improved market undertone and buying momentum, the local market should stay in positive trade as market sentiment remains bullish despite the absence of active fund leads for investors.
“Buy on dip and rebound could be the best strategy to tackle the early movement in the market,” he said.
On Friday, the local market wrapped the week 0.07% higher on mild bargain-hunting in lower liners and small caps amid cautious market sentiment over the global economic growth outlook.
On a week-on-week basis, the benchmark FBM KLCI weakened 3.84 points to 1,597.41 from last week’s close of 1,601.25.
The market was closed on Monday for the Malaysia Day celebration.
The FBM Emas Index decreased 28.36 points to 11,282.97, the FBMT 100 Index fell 30.65 points to 11,115.41 and the FBM Emas Shariah Index went up 2.21 points to 11,834.31.
The FBM 70 lost 54.74 points to 13,963.15 and the FBM Ace Index edged up 16.26 points to 4,573.27.
Sector-wise, the Financial Services Index dropped 109.82 points to 15,461.93, the Industrial Products and Services Index went down 28.36 points to 154.55, and the Plantation Index contracted by 48.50 points to 6,776.67.
Weekly turnover increased to 10.10 billion units worth RM8.57 billion from 8.52 billion units worth RM6.95 billion.
Main Market volume expanded to 6.81 billion shares valued at RM6.29 billion compared to 5.514 billion shares valued at RM6.29 billion in the previous week.
Warrants turnover was slightly lower at 1.58 billion units worth RM339.38 million against 1.754 billion units worth RM348.93 million previously.
The ACE Market volume firmed up to 1.70 billion shares valued at RM322.56 million from 1.24 billion shares valued at RM242.79 million. - Bernama