The Malaysia stock market has moved lower in five straight sessions, slipping more than 25 points or 1.6 percent along the way.
The Kuala Lumpur Composite Index now sits just above the 1,650-point plateau although it’s expected to open in the green on Tuesday.
Malacca Securities (MSSB) in a note today (Sept 10) said Despite the recent solid foreign buying of Malaysian equities, the FBM
KLCI (-0.10%) ended lower after hitting an intraday high of around the 1,659 level as YTL-related counters dragged down the sentiment for the FBM KLCI.
In the broader market, the Financial Services sector (+0.67%) was the best performer.
The Day Ahead
The FBM KLCI ended slightly lower as selling pressure continued on YTL-related stocks.
The small-cap index also declined for another session, though it remains near its trendline.
In the US, stocks rebounded as investors speculated that the Federal Reserve’s expected rate cut this month could stimulate the slowing
economy, leading to bargain hunting in technology stocks.
This week, markets will be focused on two key inflation data releases, with the CPI on Wednesday and the PPI on Thursday.
In commodity markets, Brent oil saw a mild rebound as traders bought the dip amid hurricane warnings that could threaten the US Gulf Coast.
Meanwhile, gold prices stabilized around USD 2,500, with traders awaiting the Fed’s rate cut, and crude palm oil prices hovered just below RM 3,900.
Sector Focus: With the rebound in US technology stocks, they believe traders may look to bargain hunt for oversold technology stocks on the local front.
Additionally, Apple’s ‘Glowtime’ conference, where new versions of the iPhone, AirPods, and Apple Watch has been unveiled, could generate buying interest in Apple-related tech stocks on our local exchange.
Given the strong ringgit, we continue to favour the Consumer sector.
Furthermore, uptrends have been observed in the Construction, Utilities, Oil & Gas, and Renewable Energy sectors.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended lower towards the 1,651 level.
However, the technical readings on the key index were mixed with the MACD histogram forming another negative histogram bar but the RSI trended above 50.
The resistance is envisaged around 1,666-1,671 and the support is set at 1,631-1,636.
CGS International (CGS) Asian stock markets finished lower on Monday dragged by technology shares.
The local benchmark FBMKLCI (KLCI) eased 1.63pts or 0.10% to end the day at 1,651.49.
Weakness seen across the sectors, weighed down by energy (-1.98%), industrial products (-1.16%) and plantation (-1.06%).
The only gainers were financial services (+0.67%) and REIT (+0.32%).
Trading volume rose to 3.38bn (up from 2.35bn previously) while trading value improved to RM3.85bn (up from RM3.06bn previously).
Market breadth stayed negative for the fifth day in a row as 333 gainers hammered by 738 decliners.
The benchmark gapped down at the open, but the bulls managed lift prices in the afternoon session to end the day marginally above the 20-day EMA.
CGS said they keep their cautious stance as a potential reversal may be taking place now after the KLCI broke the previous uptrend structure.
The A/D ratio does not show any signs of oversold yet, allowing for further weakness in the days ahead.
The overhead resistance at the 1,680-1,686 levels is likely to be strong.
They would turn short-term negative on the KLCI if there is a close below the 1,632-1,638 (May-July highs) levels.
Their portfolio stays in risk-on mode this week.
