Bursa Malaysia May Reverse Thursday’s Losses

Bursa Malaysia headed south again on Thursday, one day after halting the seven-day losing streak in which it had slumped more than 25 points or 1.5 percent.

The Kuala Lumpur Composite Index now sits just beneath the 1,585-point plateau although it may find renewed support on Friday. 

The FBMKLCI dipped -2.11 points to open at 1,583.53.

Malacca Securities (MSSB) in a note today (June 28) said the FBM KLCI (-0.38%) ended lower as the index was dragged by selling pressure in the Industrial Products and Telco heavyweights, in line with the profit taking activities in the regional markets and the uncertainties of the 2nd 5G network further dampened the sentiment.

The Day Ahead

Resumption of selling pressure has led to lower closing on the FBM KLCI, FBM70, and FBM Small Cap.

Overall the market sentiment remains weak as investors could be awaiting fresh leads.

Meanwhile, in the US, 3 of the major benchmark indices ended higher amid healthier economic data, (i) the US GDP came in at 1.4%, (ii) the US durable goods orders unexpectedly rose in May, but (iii) pending home sales saw a surprise decline in May as demand cooled.

Still, traders will be watching the PCE data that will be released later tonight for further clarity on the Fed’s direction moving forward.

On the commodity markets, Brent oil rebounded strongly as traders speculated on higher summer demand, while the gold price traded along USD2320-2330.

For CPO, it traded below RM3,900.

Sectors focus: Still, MSSB believed there will be opportunities to position for mid-to-long run under the Technology sector driven by the data, AI, and cloud services catalysts.

They liked the HDD, EMS, and cybersecurity segments.

Meanwhile, they believes the Construction and Building Materials segment are ripe for extension of their upward move respectively.

Meanwhile, the Renewable Energy segment will be a long term sector under the National Energy Transition Roadmap.

Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended lower dipping towards the 1,584 level.

The technical readings on the key index were negative with the MACD Histogram forming a negative bar, while the RSI oversold.

The resistance is envisaged around 1,599-1,604 and the support is set at 1,569-1,564.

CGS International (CGS) said weakness was seen in Asian stock markets on Thursday with Hong Kong’s HSI (-2.06%) the worst hit.

The local benchmark FBMKLCI (KLCI) pared the previous day’s gains, losing 6.01pts or 0.38% to end the day at 1,584.94.

Selling pressure resumed across the board, weighed down by telecommunications (-1.46%), technology (-1.10%) and energy (-1.08%).

Construction (+0.25%) and REIT (+0.01%) were the only gainers.

Trading volume dropped to 4.23bn (down from 4.73bn on Wednesday) while trading value slipped to RM3.13bn (down from RM3.22bn previously).

Market breadth turned negative once again as 320 gainers were thumped by 804 losers.

The benchmark failed to sustain above the 50-day EMA yesterday and formed a bearish engulfing pattern, keeping the odds in favour of the bears for the immediate term.

As noted previously, the KLCI remains below the trend line drawn from the 1,446 low, which is another negative.

Falling below 1,582 may see the benchmark fall to test the 1,565-1,575 support next.

There is still light at the end of the tunnel, however.

The benchmark needs to close firmly above Wednesday’s high of 1,593 to signal that a short-term rebound up to test the psychological 1,600 resistance is likely taking place.

The following resistance is the downtrend line (1,610) from 1,632.

Their portfolio has reverted to riskoff mode this week.

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