Bursa likely to trend sideways in week ahead amid uncertain regional performance

The short-term KLCI market sentiment is expected to remain jittery as investors remain cautious due to persisting worries about inflation and the tighter policy stance of global central banks. (Photo by Low Yen Yeing/The Edge)

The short-term KLCI market sentiment is expected to remain jittery as investors remain cautious due to persisting worries about inflation and the tighter policy stance of global central banks. (Photo by Low Yen Yeing/The Edge)

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KUALA LUMPUR (Sept 17): Bursa Malaysia is expected to trade sideways next week, with the benchmark FBM KLCI moving between the 1,460 and 1,480 levels amid an uncertain regional performance, an analyst said.

Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said that technically, the KLCI should see immediate support at 1,460 and resistance at 1,500.

He said the short-term KLCI market sentiment is expected to remain jittery as investors remain cautious due to persisting worries about inflation and the tighter policy stance of global central banks.

“We advise investors to stay alert for bargain-hunting opportunities,” he told Bernama.

UOB Kay Hian Wealth Advisors Sdn Bhd head of wealth research and advisor Mohd Sedek Jantan said the short trading week started positively following a positive performance on Wall Street last week, coupled with an unexpected moderation in Chinese inflation data to 2.5% in August from 2.7% previously and an easing in European natural gas prices. 

“The KLCI started the week slightly higher, with energy and banking stocks leading the gainers,” he said.

However, he said the bourse momentum was getting slower on Tuesday (Sept 13) due to profit-taking, despite the positive performance of US markets, with investors awaiting the US inflation report for August.

“As the US consumer price index report came in 0.1% higher over last month, and 8.3% year-on-year versus expectations of an 8.1% [increase], it has pushed a sizeable sell-off.

“The negative sentiment spiked market volatility and pushed the KLCI to close lower with the regional market,” he said.

As such, he said a slower recovery in the KLCI is expected next week, pending the US Federal Reserve’s decision. 

Mohd Sedek said investors are also waiting for the development from the meeting between Chinese President Xi Jinping and Russia’s Vladimir Putin on Saturday.

“As the Malaysian market was closed for Malaysia Day, any surprise data might have less impact. Overall, the market will remain cautious next week,” he said.

Bursa and its subsidiaries were closed on Friday, in conjunction with Malaysia Day, and will resume operations next Monday.

On a week-on-week basis, the KLCI fell 29.22 points to 1,467.31 from 1,496.53, despite rebounds on Wall Street and of regional peers after the previous sell-off due to rate hike concerns. 

For the index board, the FBM Emas Index was down by 153.64 points to 10,474.58, the FBMT 100 Index lost 160.80 points to 10,214.65, the FBM Emas Shariah Index decreased 114.66 points to 10,578.82, the FBM ACE was 24.73 points lower at 4,833.75 and the FBM 70 erased 29.24 points to 12,727.58.

Sector-wise, the Plantation Index lost 135.85 points to 6,858.12, the Industrial Products and Services Index eased 4.13 points to 181.47, and the Financial Services Index shaved 325.70 points to 16,491.48, while the Energy Index was 30.46 points stronger at 737.62.

Weekly turnover fell to 10.52 billion units worth RM7.59 billion from 11.39 billion units worth RM7.86 billion in the previous week.

The Main Market volume was lower at 6.91 billion shares valued at RM6.22 billion from 7.01 billion shares valued at RM6.29 billion in the previous week.

Warrant volume contracted to 807.75 million units worth RM121.09 million from 1.28 billion units worth RM205.47 million last week.

The ACE Market volume shrank to 2.8 billion shares valued at RM1.24 billion from 3.07 billion shares valued at RM1.36 billion the week before.