Bargain Activities May Emerge But Upside On FBM KLCI May Be Capped At 1600

Bargain hunting activities may emerge following yesterday’s decline, but investors’ sentiment is expected to remain wary and the upside on the FBM KLCI could be limited to around 1,600 for now, Malacca Securities said in a note.

It said that it was still optimistic about the recovery-themed sectors on the back of declining Covid-19 daily confirmed cases. On the commodities, the crude oil price is hovering above USD100, while the FCPO traded above RM6,200.

The stockbroking firm said that it expects Indonesia’s ban on palm oil-related products to continue to benefit the plantation sector over the near term.

“Investors may position themselves within the sector ahead of the stronger earnings season due to elevated FCPO prices in 1Q22. Besides, we may see mild bargain hunting activities in the technology sector The FBM KLCI skidded below the key 1,600 level as selling pressure dominated the

On the performance of Bursa, Malacca Securities said FBM KLCI skidded below the key 1,600 level as selling pressure dominated the local bourse amid bearish regional sentiment driven by concerns over China’s Covid-19 situation and anticipation on more hawkish interest rate hikes tone in the US by the Feds.

It said that The FBM KLCI (-0.8%) snapped a 3-day winning streak as volatility strikes alongside with the weakness across the regional markets. “The lower liners were also downbeat, while the plantation sector (+2.9%) was the sole winner against the negative broader market,” the stockbroking firm said.

On the global markets, it said that Wall Street rebounded as the Dow (+0.7%) rose after recovering from its intraday low on bargain hunting activities ahead of the corporate earnings releases from technology giants later this week. “The European stock markets also remained downbeat, while Asia stock markets ended mostly lower,” the stockbroking firm said.

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