Bursa Malaysia on Tuesday ended the two-day winning streak in which it had climbed more than 25 points or 1.5 percent.
The Kuala Lumpur Composite Index now sits just above the 1,675-point plateau and it’s looking at another soft start again on Wednesday.
At 9.16am, the FBMKLCI dipped -14.00 points to open at 1,662.65.
According to Malacca Securities (MSSB) in a note today (Sept 4) the FBM KLCI (-0.09%) closed marginally lower, dragged down by selling pressure in the Telco & Media and Industrial Products & Services sectors, notably CDB (-10.0 sen) and PCHEM (-13.0 sen).
This performance mirrored the regional markets, which also struggled amid a lack of fresh catalysts.
The Day Ahead
The Bursa exchange ended on a mixed note as traders shifted their focus from heavyweights to small-cap and lower-liner stocks.
In the US, stock markets closed significantly lower, dragged down by Nvidia, which saw nearly 10% of its value, or USD 279 billion, wiped out in a single session.
Additionally, ISM manufacturing data came in at 47.2, indicating continued contraction in business activity for August.
Looking ahead, traders will be closely watching several jobs reports, with the non-farm payroll data for August set to be released on Friday.
In the commodity markets, MSSb noted that Brent oil dropped sharply due to weak economic data from China, while gold prices continued to trade sideways around the USD2,500 mark.
CPO prices remained above the RM3,900 level.
Sector Focus: With negative sentiment prevailing in the US, they anticipated selling pressure in the local Technology sector.
However, MSSB said they see potential in sectors benefiting from a stronger ringgit, such as Consumer, Construction, Building Materials, and Utilities.
Additionally, they favoured stocks with strong fundamentals, growing earnings, and high dividend yields.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended lower towards the 1,676 level.
However, the technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,691-1,696 and the support is set at 1,656-1,661.
Maybank Investment Bank (Maybank) said the KLCI failed to hold onto its early gains amid lacklustre trading.
At day’s end, the KLCI fell 1.54pts, or 0.09%, to close at 1,676.65pts.
Leading the decliners were CDB, PCHEM and IOICORP.
Market breadth was mildly negative, with losers outnumbering gainers by 518 to 502.
A total of 2.98b shares worth MYR2.94b changed hands.
The KLCI is expected to remain sluggish today as sentiment will stay cautious ahead of US jobs report as well as Bank Negara’s MPC meeting on Friday.
Technically, they expected the benchmark index to range between 1,660pts and 1,680pts today, with supports at 1,623pts and 1,596pts.
CGS International (CGS) said Asian stock markets pared gains on Monday with Indonesia’s JCI (-1.01%) leading the losses.
The local benchmark FBMKLCI (KLCI) stayed relatively flat, retreating 1.54pts or 0.09% to end the day at 1,676.65.
The broader market was supported by healthcare (+1.08%), construction (+0.36%) and utilities (+0.13%).
Conversely, telecommunications (-0.94%), technology (-0.87%) and plantation (-0.79%) were the top laggards.
Trading volume decreased to 2.98bn (down from 3.25bn previously) while trading value dropped to RM2.94bn (down from RM3.02bn previously).
Market breadth turned slight negative as 502 gainers lost out marginally to 518 decliners.
The benchmark continued to chop sideways in a narrow range yesterday.
The last couple of days saw volatility fall sharply, likely signalling that an expansion in volatility may take place in the next couple of days.
The bulls may try to push through the overhead cluster of resistances surrounding the 1,680-1,686 levels next.
The 1,700 psychological level may also act as a magnet to draw prices higher in the near-term.
The 1,632-1,638 (May-July highs) levels remain as support for now. Their portfolio stays in risk-on mode this week.
