KUALA LUMPUR: Bursa Malaysia is likely to trend lower next week with the FBM KLCI moving towards the 1,600 level amid the lack of local catalysts.
Phillip Capital Management Malaysia senior vice-president (investment) Datuk Dr Mohd Nazri Khan Adam Khan said the weaknesses in the local market would be cushioned by the expectation of a stronger Wall Street performance.
This was due to optimism on the trade breakthrough between the United States and China, as well as rising Brent crude oil prices, he added.
“The (current) bearish sentiment is expected to be only temporary, as the fundamental factors remained strong. Note that our foreign-exchange reserves are on surplus, energy prices are well supported, and inflation rate is low. The strong support is still valid at 1,600 points,“ he told Bernama.
He added that the immediate resistance stood at between 1,630 points and 1,650 points.
During the week just ended, Bursa Malaysia was traded mostly lower due to the absence of firm direction, while market sentiment was further weakened by Malaysia’s possible removal from the World Government Bond Index.
Stock market indices provider FTSE Russell has placed Malaysia on the fixed income watch list for at least six months, following the completion of its first fixed-income country classification review.
On a Friday-to-Friday basis, the benchmark FBM KLCI settled 8.10 points easier at 1,622.07.
The FBM Emas Index fell 64.23 points to 11,497.23, the FBMT 100 Index eased 61.09 points to 11,324.88 and the FBM Emas Shariah Index dropped 72.37 points to 11,690.02.
The FBM Ace Index narrowed 56.55 points to 4,692.85 and the FBM 70 decreased 95.98 points to 14,382.51.
Sector-wise, the Financial Services Index fell 76.81 points to 16,745.26, the Plantation Index declined 40.43 points to 7,228.91 and the Industrial Products and Services Index added 0.17 of-a-point to 168.30.
Weekly turnover fell to 14.13 billion units worth RM9.25 billion against 17.52 billion units worth RM11.47 billion last Friday.
Main Market volume depreciated to 9.32 billion shares valued at RM8.41 billion against 13.25 billion shares valued at RM10.53 billion.
Warrant turnover eased to 2.03 billion units worth RM1.98 billion from 2.37 billion units worth RM540.50 million.
The ACE Market volume was higher at 2.78 billion shares valued at RM409.25 million versus 1.89 billion shares valued at RM396.55 million.
Gold futures contract on Bursa Malaysia Derivatives is expected to trade lower next week, as growing optimism over the global economic recovery will curb demand for the precious metal, said Phillip Futures Sdn Bhd dealer Ong Su Ling.
“A slew of economic data from the US and China released last week indicated that the global economy is on the path of recovery and this will make gold an unattractive safe-haven asset,” she told Bernama.
On Thursday, the US Labor Department announced that the initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 192,000 for the week ended April 13, the lowest level since September 1969.
Meanwhile, the Markit and Caixin Purchasing Managers’ Indices for the US and China, respectively, show the percentage of respondents whose business are expanding.
The US Markit stayed unchanged at 52.4 from last month’s reading, while China Caixin rose to its four-month low of 54.4 in March from 51.1 in the previous month.
For the week just ended, the gold futures market started on a weak momentum as progress in the US-China trade talks lifted risk sentiment, taking the sheen off safe-haven bullion.
The local market was unchanged from Wednesday onwards as the anticipation of better economic growth continued to weigh on gold futures.
The gold futures market movement was also influenced by the benchmark US Commodity Exchange’s (Comex) gold futures performance, the ringgit versus US dollar, as well as crude oil prices.
On a Friday-to-Friday basis, April 2019, May 2019, June 2019 and July 2019 were 30 ticks lower each at RM170.00, RM170.00, RM169.90 and RM170.00 a gramme, respectively.
Weekly turnover was nil compared with 13 lots worth RM222,480 last week, while open interest remained unchanged at 34 contracts. — Bernama