KUALA LUMPUR, Jan 16 — The key benchmark FTSE Bursa Malaysia (FBM KLCI) is expected to trend lower next week on lingering concerns over the slowdown in China and depressing crude oil prices.
Affin Hwang Investment Bank vice-president and retail research head Datuk Dr Nazri Khan Adam Khan said instability in the Chinese currency and equity market would aggravate the negative mood in the market.
“Given that the renminbi is unstable, global sentiment is likely to be fragile in the near term,” he told Bernama.
On the technical front, the FBM KLCI’s trend had turned bearish after the index fell 30 points or 1.7 per cent in the first week of 2016.
Immediate support and resistance for the FBM KLCI are currently pegged at 1,650 and 1,680 respectively, and given the current challenging economic climate, the index will continue to trade on a downside-bias towards 1,600.
Malaysia’s Industrial Production Index, which climbed a marginal 1.8 per cent year-on-year, the slowest in 16 months, might suggest a breather in the local economy, therefore putting a lid on upside momentum.
Meanwhile, FXTM Research Analyst Lukman Otunuga said crude oil remained fundamentally bearish on concerns around the unrelenting oversupply in the markets, which is still at record levels.
“From a technical standpoint, the outlook for West Texas Intermediate crude oil is heavily bearish as there has been consistently lower lows and lower highs,” he added.
Furthermore, he said renewed weakness for the ringgit versus the US dollar, which was down 2.5 per cent week-on-week putting the currency pair on track for the lowest finish since November 2015, would also act as a dragging catalyst.
“Sector-wise, we see ample play on technology stocks which benefit strongly from the conclusion of Trans-Pacific Partnership Agreement, the biggest free trade agreement in Malaysian history and lay the foundation for bigger export for years to come,” he added.
On a weekly basis, the FBM KLCI fell 29.06 points to 1,628.55 from 1,657.61 recorded last Friday.
The FBM Emas Index fell 204.26 points to 11,419.02, the FBMT100 Index decreased 196.37 points to 11,093.6, the FBM Emas Shariah lost 259.05 points to 12,365.33, the FBM 70 declined 222.78 points to 12,906.84, and the FBM Ace slid 108.56 points to 6,214.81.
Sector-wise, the Finance Index fell 227.21 points to 13,691.38, the Plantation Index gave up 93.44 points to 7,532.75 and the Industrial Index was 68.78 points lower at 3,134.45.
Weekly turnover declined to 9.51 billion units valued at RM9.8 billion from 11.30 billion units valued at RM10.19 billion last week.
Main market volume fell to 6.22 billion shares valued at RM9.04 billion from 7.39 billion shares valued at RM9.10 billion.
Warrant turnover decreased to 1.56 billion units worth RM319.89 million from 2.22 billion units worth RM488.62 million.
The ACE market declined to 1.72 billion shares worth RM437.52 million from 2.29 billion shares worth RM592.68 million previously. — Bernama
