Investors Should Focus On Banking, REIT’s And Selected Consumer Stocks On The Near Term

Investors should remain cautious and on the defensive side, banking, REITs, and selected consumer stocks may stay focused over the near term, Malacca Securities said.

The stockbroking house said the sentiment will remain negative-bias as investors mulled the US Fed Chairman’s testimony on the commitment in interest rate hikes to tame inflation while eyeing Malaysia’s and Japan’s inflation rates tomorrow.

Nevertheless, it said that the oversold stocks may still look attractive for bargain hunting activities.  Commodities prices have shown a downtrend move amid growing recession worries; the Brent oil price hovered around USD111, while the CPO price dropped to RM4,600.

On the local bourse, it said that the FBM KLCI (-1.8%) formed a bearish engulfing candle as selling pressure demonstrated no signs of an upward move yet.

It said that the lower liners also turned downbeat again, while all the 13 major sectors on the broader market were splashed in red with the plantation sector (-4.6%) taking the worst hit.

On the global markets, Wall Street edged mildly lower after erasing all its intraday gains as the Dow (-0.2%) fell after US Federal Reserve Chairman Jerome Powell acknowledged that the steep interest rate hikes may tip the economy into recession. Both the European and Asia stock markets ended on a negative note.

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