KUALA LUMPUR: The FBM KLCI is likely to test the resistance level of 1,700-point next week with outlook hinges upon progress of the trade discussion between the US and China.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said remarks from the two world’s largest economies would be closely scrutinised in the run-up to their meeting at the end of the month.
According to news reports, Chinese Vice-Premier Liu He would likely visit Washington on Jan 30 and 31 for further trade talks.
“Based on the interest rate futures, it appears that the market has been expecting no hike in the Federal Fund rate this year. Therefore, should the positive sentiment continues, the FBM KLCI might increase towards the resistance level of 1,700 points.
“However, technical indicators such as stochastic is lingering at overbought position. This signals the FBM KLCI is still fragile in the immediate terms,“ he told Bernama.
For the week just ended, the FBM KLCI was traded mostly higher, mainly influenced by external factors such as US Federal Reserve’s dovish stance on interest rate hikes and the potential US-China trade negotiations.
On a Friday-to-Friday basis, the benchmark FBM KLCI settled 13.44 points higher at 1,683.22.
The FBM Emas Index appreciated 205.01 points to 11,618.03, the FBMT100 Index increased 177.88 points to 11,501.22, the FBM 70 soared 567.58 points to 13,591.38, the FBM Emas Shariah Index improved 210.56 points to 11,567.47, and the FBM Ace expanded 163.67 points to 4,458.10.
Sector-wise, the Finance Index bagged 173.84 points to 17,415.63, the Industrial Products and Services Index eased 0.76 of-a-point to 164.87, while the Plantation Index was 236.74 points higher at 7,117.64.
On a Friday-to-Friday, the weekly turnover almost doubled to 14.17 billion units worth RM11.30 billion against 7.22 billion units worth RM4.79 billion.
Main Market volume increased to 10.41 billion units valued at RM10.59 billion versus 5.17 billion units valued at RM4.37 billion.
Warrants turnover advanced to 1.90 billion units worth RM368.88 million from 1.23 billion units worth RM282.94 million.
The ACE Market volume appreciated to 1.85 billion shares valued at RM341.04 million against 719.60 billion shares valued at RM127.20 million.
The gold futures contract on Bursa Malaysia Derivatives is expected to be lower next week, as weak market sentiment would limit any price upside potential, said a dealer.
The local gold market is expected to be quiet as most investors have shifted their investment from safe-haven assets to equities, he said.
“We expect there will be no positive catalysts to boost the gold market as optimism over further trade talks between the US and China has improved risk appetite, making bullion less attractive.
“With the ringgit expected to increase further, the demand for gold will be decreasing,” he told Bernama.
On a Friday-to-Friday basis, spot month January 2019 went down 40 ticks to RM170 a gramme, February 2019 fell 36 ticks to RM170.20 a gramme, while March 2019 and April 2019 deducted 28 ticks each to RM170.70 and RM170.80 a gramme, respectively.
Weekly turnover was four lots worth RM68,140 from five lots worth RM85,420 in the previous week, while open interest rose to 23 contracts versus 19 contracts last week. — Bernama