The energy and plantation stocks are likely to remain volatile over the near term, as selling pressure arising from declining commodity prices interspersed with the bargain hunting activities, Malacca Securities said in a note.
On the other hand, it still favours defensive sectors such as the consumer, banking and REITs sectors.
The stockbroking firm said that while the overnight gains on Wall Street may spill over to the local bourse, it reckons any gains should be short-lived on the back of mounting concerns over potential recession as well as the inflationary pressure that may hit corporate earnings going forward.
Commodity-wise, the Brent oil prices continued to retreat, settling around USD110 per barrel mark, while the CPO price saw mild improvement around RM4,750.
Nevertheless, Malacca Securities said that the surging fertiliser cost and worker shortages may be several challenges that is facing by the farmers.
On the local bourse, it said that the FBM KLCI ended in a flattish mode after see-sawing between mild gains and losses yesterday. The lower liner, however, ended mixed, while the broader market closed mostly negative with the energy.
On the global markets, Wall Street advanced as the Dow (+0.6%) rose on a higher risk appetite for equities following the decline in treasury yields.
It said that the European stock markets, however, remained downbeat after reversing all their intraday gains, while Asia stock markets closed mostly higher.
