KUALA LUMPUR, March 2 ― The benchmark FBM KLCI is expected to trend lower towards the 1,680 points support level next week driven by the soft ringgit, weakening oil prices, negative impact of geopolitical factors, namely tensions between India and Pakistan, as well as the slow breakthrough in the US-China trade negotiations.
Phillip Capital Management Malaysia senior vice president (Investment) Datuk Dr Mohd Nazri Khan Adam Khan said the psychological resistance was at 1,700 points and followed by the next resistance at around 1,730 points.
Mohd Nazri noted that investors were still on the sidelines, awaiting developments in the tariff war saga after US Trade Representative Robert Lighthizer said he preferred China to offer a bigger concession than buying more US products.
Meanwhile, the Chinese economy showed a negative result in its factory sector data, with adverse values for the third month in a row, after the country’s manufacturing purchasing managers’ index dropped lower.
“All-in-all we believe the slight improvements in the factory sector are due to further investments in Chinese infrastructure in addition to improving prices of industrial products from higher demand for commodities.
“Meanwhile, in another geopolitical update, the summit between the US and North Korea ended poorly, with an immediate impact seen in Seoul's Kospi which slid in reaction to the news by nearly two per cent,” he told Bernama.
As for stock picks, investors should aim for defensive-consumer products, such as Nestle (M) Bhd, Dutch Lady Milk Industries Bhd, and Fraser & Neave Holdings Bhd (F&N), said Mohd Nazri.
Meanwhile, he also said the ringgit retreated against the US dollar at 4.0720/0770 yesterday from Thursday's 4.0650/0680, reflecting the impact of new developments in the Brexit negotiations as investors shifted back to safe havens.
“From the technical aspect, the FBM KLCI charted a weak performance, as the key index is currently below the previous 1,700-points support.
“Technically speaking, this is viewed as a normal breather, after the index tested the resistance downtrend line during last week’s session,” added Mohd Nazri.
On a Friday-to-Friday basis, the FBM KLCI settled 20.66 points lower at 1,700.76.
The FBM Emas Index trimmed 204.38 points to 11,798.12, the FBMT 100 Index decreased 194.93 points to 11,663.95 and the FBM Emas Shariah Index eased 227.95 points to 11,725.16.
The FBM 70 slipped 453.57 points to 13,961.89 and the FBM Ace Index eased 65.22 points to 4,650.26.
Sector-wise, the Financial Services Index went down 111.26 points to 17,729.46 and the Plantation Index depreciated 139.16 points to 7,273.94, but the Industrial Products and Services Index inched up 0.34 of-a-point to 168.37.
Weekly turnover fell to 12.92 billion units worth RM11.74 billion from 15.75 billion units worth RM12.61 billion.
Main Market volume declined to 8.90 billion shares valued at RM10.87 billion against 10.84 billion shares valued at RM11.56 billion.
Warrants turnover decreased to 2.51 billion units worth RM533.22 million from 3.10 billion units worth RM683.63 million.
The ACE Market volume slid to 1.50 billion shares valued at RM338.35 million from 1.80 billion shares valued at RM366.49 million. ― Bernama
