KUALA LUMPUR, March 9 — Bursa Malaysia is expected to trend lower towards 1,650 next week, driven by overnight weakness on the US stock market, concerns about progress of the US-China trade negotiations, a negative economic outlook portrayed by the European Central Bank, weakening technical indicators, and falling ringgit.
Phillip Capital Management Malaysia senior vice-president (Investment) Datuk Dr Mohd Nazri Khan Adam Khan said the sell-off in global equities gathered pace following uncertainty over the US-China trade negotiations and the fears unleashed by the European Central Bank over global economic growth on its fresh stimulus.
“One of Wall Street’s classic economic indicators — the Dow Jones Transportation Average — has recently dropped in form, making its longest losing streak since the past 10 years,” he told Bernama.
On the domestic front, the KLCI weakening technicals should be cushioned by positive local economic data.
These include the Bank Negara Malaysia’s forex reserves, which retained an uptrend for the second successive month, in spite of looming concerns over the on-going US-China trade war and prospects of a waning global growth.
“Fundamentally, we expect any weaknesses towards the 1,650 level will attract more bargain hunting as anchor funds nibble the beaten-down stock at lower price.
“Foreign investors are starting to invest in Malaysia again and this positive sign was led by investors’ rising confidence, as the country’s political tension has stabilised since the last general election.
“In the two months we saw improvement in equity market fund flow amounted to net US$40 million (RM163.5 million) oversea inflow against the US$2.7 billion outflow in 2018,” he said.
Mohd Nazri viewed that the bullish bias and monthly uptrend line above the meaningful 1,600 support level remained firmly intact over the longer term.
The FBMKLCI support remains at 1,650 and 1,630 while resistance looms at 1,700 and 1,720 levels.
He said for the next week outlook, investors should stay away from cyclical sectors and move towards momentum sectors such as energy and basic resource stocks. Investors should accumulate oil and gas counters such as Dayang, Carimin, Perdana and Hibiscus.
On a Friday-to-Friday basis, the FBM KLCI settled 20.86 points lower at 1,679.90.
The FBM Emas Index trimmed 58.89 points to 11,739.23, the FBMT 100 Index decreased 73.47 points to 11,590.48 but the FBM Emas Shariah Index rose 12.66 points to 11,737.82.
The FBM 70 erased 199.89 points to 14,161.78 and the FBM Ace Index was 40.07 points higher at 4,690.33.
Sector-wise, the Financial Services Index declined 237.07 points to 17,492.39 and the Plantation Index eased 9.80 points to 7,264.14 but the Industrial Products and Services Index inched up 0.89 of-a-point to 169.26.
Weekly turnover increased to 14.55 billion units worth RM11.43 billion from 12.92 billion units worth RM11.74 billion.
Main Market volume appreciated to 10.47 billion shares valued at RM10.53 billion against 8.90 billion shares valued at RM10.87 billion.
Warrants turnover advanced to 2.65 billion units worth RM577.32 million compared with 2.51 billion units worth RM533.22 million.
The ACE Market volume slid to 1.42 billion shares valued at RM316 million from 1.50 billion shares valued at RM338.35 million. — Bernama
