OANDA senior market analyst Jeffrey Halley said the trajectory of Covid-19 cases in Malaysia continued to weigh on Bursa Malaysia sentiment, and it would likely to do so into next week unless a marked improvement was seen over the New Year break.
He noted that gains would be capped at 1,660 with the FTSE Bursa Malaysia KLCI (FBM KLCI) potentially dropping to 1,620.
At those levels, and with investors returning to work in the New Year, value buyers should emerge, putting a floor under any further sell-offs, added Halley.
"If the US Republicans hold Georgia in the US Senate election on Wednesday (Malaysian time) equity markets should rally, lifting Bursa Malaysia too," Halley told Bernama, adding that the 1,700 level should be broken in January, but it was unlikely to be next week.
"The 1,700 level is more likely to be tested in the second half of the month," he added.
Halley pointed out that regional equities elsewhere would need to rally, and Malaysia needed to avoid a post-holiday spike in COVID-19 for that to happen.
"The main factor driving markets next week is the Georgia Senate election in the US on Wednesday (Malaysian time). A surprise win by the Democrats will likely provoke a sharp retreat by equities globally.
"However, I expect the effects to be transitory, and for Malaysia's equity rally to resume in earnest in the second week of January, presuming that the COVID-19 situation domestically does not deteriorate badly. Large-scale lockdowns will delay the rally resumption," he said.
Bursa Malaysia trading was range-bound for the week just ended, mainly driven by year-end window dressing activities.
On Thursday, the key index was weighed down by persistent selling activities in heavyweights including Sime Darby Plantation due to a ban imposed by the US Customs and Border Protection (CBP) on its products over allegations of forced labour in its production process.
Sime Darby Plantation lost 18 sen to RM4.99, while the Plantation Index trimmed 109.97 points to 7,302.84.
In September 2020, the CBP had issued a withheld release order against FGV Holdings Bhd.
On a Thursday-to-Thursday basis, the benchmark FBM KLCI decreased 13.96 points to 1,627.21 from 1,641.17 last week.
On the scoreboard, the FBM 70 rose 30.3 points to 15,142.84, the FBM ACE Index strengthened 77.39 points to 10,734.69, the FBM Emas Index fell 48.99 points to 11,761.93, the FBMT 100 Index erased 67.94 points to 11,501.99, and the FBM Emas Shariah Index reduced 124.03 points to 13,159.15.
Sector-wise, the Plantation Index contracted 114.44 points to 7,302.84, the Industrial Products and Services Index added 2.22 points to 178.11, while the Financial Services Index increased 56.18 points to 15,316.55.
The Energy Index advanced 16.92 points to 896.39, the Healthcare Index gave up 100.81 points for 3,571.55, and the Technology Index added 2.31 points to 69.72.
Weekly turnover jumped to 31.20 billion units worth RM14.88 billion from 28.99 billion units worth RM14.05 billion last week.
Main Market volume went up to 18.76 billion shares valued at RM12.5 billion from 17.26 billion shares valued at RM10.7 billion previously.
Warrants turnover, however, nosedived to 1.61 billion units worth RM264.98 million from 7.85 billion units worth RM364.77 million in the previous week.
The ACE Market volume advanced to 10.83 billion shares valued at RM3.11 billion from 9.52 billion shares valued at RM2.99 billion previously. - Bernama
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