KUALA LUMPUR, June 16 ― Weak investor sentiment will likely drive Bursa Malaysia to trade on a downtrend next week.

OANDA Head of Trading in Asia-Pacific, Stephen Innes, said the US Federal Reserve’s (Fed) recent hawkish stance would also weigh negatively on global equity markets.

The US central bank raised interest rates for the second time this year by  a quarter-percentage point to a range of between 1.75 per cent and 2.0 per cent at its recent policy meeting, while also signalling two additional hikes for the year.

"The ECB could play a part in influencing trading if they take on a hawkish stance (during its meeting on Thursday).

"Besides higher interest rates, the never-ending dispute between the US and China will keep foreign investors very guarded in respect of regional risks in general and even moreso in Malaysia on the fiscal overhang,” Innes told Bernama.

He noted that the FBM KLCI is more likely to trade between 1,725 and 1,775 next week.

"But, on a technical break of 1,725,  it could trigger some stops and given how thinly traded the markets are, we could see an extension lower towards 1,700,” he said.

The local bourse underwent choppy trading during the week just ended on lack of catalysts and in line with regional peers.

The market was traded half-day on Thursday and closed on Friday for the Hari Raya Aidilfitri holiday.

On a Friday-to-Thursday basis, the benchmark FTSE Bursa Malaysia KLCI was 16.54 points easier at 1,761.78 from 1,778.32.

The FBM Emas Index declined 94.29 points to 12,378.78, the FBMT100 Index trimmed 105.78 points to 12,164.78, the FBM 70 shed 100.03 points to 14,828.33 and the FBM Emas Shariah Index gained 8.11 points to 12,473.71.

The FBM Ace advanced 22.92 points to 5,318.32.

On a sectoral basis, the Finance Index slumped 385.06 to 1,761.78 and the Industrial Index fell 36.93 points to 3,165.25. But, the Plantation Index jumped 121.68 points to 7,782.65.

Weekly turnover narrowed to 8.71 billion units worth RM9.83 billion against 16.16 billion units worth RM14.38 billion previously.

Main market volume declined to 5.59 billion shares worth RM9.17 billion compared to 10.38 billion shares worth RM12.86 billion.

Warrants turnover fell to 1.86 billion units valued at RM424.42 million from 3.33 billion units valued at RM790.33 million.

The ACE market volume eased to 1.26 billion shares worth RM234.38 million against RM2.45 billion shares worth RM537.69 million. ― Bernama