The FBM KLCI (+0.51%) ended higher in line with the regional markets as buying interest focused within the banking and telco stocks ahead of the Budget 2024.
Meanwhile, the Construction Sector (+1.59%) gained, while the Plantation sector (-0.39%) despite a rebound in crude palm oil prices above RM3,600.
At 9.15, the FBMKLCI opened lower by -1.14 points at 1,442.68.
RHB Retail Research said today (Oct 13), the FKLI attempted to climb above the 50-day SMA line, but ended up losing most of its intraday gains yesterday – it closed just 4.50 pts higher at 1,442 pts. The late selling pressure indicates an impending pullback in the upcoming sessions.
The index opened at 1,438.50 pts and briefly touched the low of 1,436.50 pts before rebounding strongly to a high of 1,449 pts. However, it shed most of these gains before the close. Despite its attempt to move higher, the FKLI’s late selling pressure – which kept it below the 50-day SMA line – suggests weak momentum and potentially retreat towards the 200-day SMA line.
In the medium term, RHB expects the index to remain within the major downtrend while experiencing back-and-forth movement below the 50-day SMA line. Based on the overall bearish structure, RHB holds on to a negative trading bias.
Traders should hold on to the short positions initiated at 1,447.50 pts (17 Aug’s close). To manage the trading risks, the stop-loss threshold is set at 1,468.50 pts.
The immediate support level is marked at 1,400 pts, with the lower support level at 1,368.50 pts (8 Jun’s low). The nearest resistance level stays at 1,450 pts, followed by 1,468.50 pts, which was 1 Aug’s high.
Malacca Securities (MSSB) said the FBMKLCI closed stronger for the fifth session prior to the Budget 2024.
Meanwhile, the US stock markets ended in the negative territory, snapping a 4-day winning streak as the US Treasury yield rose following the hotter-than-expected US CPI data.
Investors could be pricing in a more hawkish environment from the Fed and tighter-for-longer conditions on the monetary policies going forward. Although selling pressure was seen on Wall Street, MSSB believes the buying interest may persist and traders may be positioning ahead of the Budget 2024 speech.
Commodities wise, the Brent crude oil traded along the USD86/bbl level, while the CPO closed higher above RM3,600/MT as demand from China has improved recently.
Sector focus: MSSB said as the nation is heading into the Budget 2024, they believe the market to continue banking on the current momentum within the construction, property and building material sectors with the anticipation of more infrastructure projects to be dished out in the event.
Also, MSSB likes the renewable energy and utilities sector as some of the policies may be pointed towards the NETR and NIMP 2030 blueprints in the Budget 2024.
The FBM KLCI ended higher, securing above the 1,430 level. The technical readings on the key index were more positive with the MACD Histogram extending another positive bar, and the RSI breaking above 50. The resistance is envisaged around 1,450-1,460 and the support is located around 1,420-1,430.
Maybank Investment Bank (Maybank IB) said the FBMKLCI Index gapped up at the opening bell and hovered in positive territory throughout the day, in line with regional markets.
At day’s end, the FBMKLCI Index added 7.33pts, or 0.51%, to 1,443.82pts, led by advances in NESTLE, PETGAS and PMETAL.
Market breadth was positive with gainers outnumbering losers by 587 to 341. A total of 3.38b shares valued at MYR2.03b changed hands. All eyes will be monitoring the Budget 2024, which will be tabled today.
This, together with heightened geopolitical tensions and pre-weekend profit taking, may weigh on sentiment. Technically, Maybank IB expects the FBMKLCI Index to range between 1,430pts and 1,450pts today, with supports at 1,400pts and 1,395pts.
