KUALA LUMPUR (Bernama): Bursa Malaysia’s benchmark index is expected to remain cautious from Monday (Sept 21), with investor sentiment likely to be shaped by the Federal Reserve’s latest policy decision, developments in West Asia, oil prices and shifts in US interest rate expectations.
IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said higher oil prices and geopolitical uncertainty could keep inflation expectations elevated, while shifts in US interest rate expectations may continue to influence global bond yields, the US dollar and emerging-market flows.
Against this backdrop, we expect investor positioning in Bursa Malaysia to remain relatively defensive, with greater interest in sectors offering more resilient earnings and domestic or commodity-linked exposure.
"The market’s defensive characteristics could provide some insulation from weakness in technology-heavy regional indices, particularly if higher oil prices continue to pressure global risk appetite,” he told Bernama.
Meanwhile, Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng told Bernama that he expects the benchmark index to remain in consolidation next week, with scope for a technical rebound should oil prices and US Treasury yields continue to ease.
"The sharp correction has brought valuations to more attractive levels, which could encourage local institutions and bargain hunters to gradually rebuild positions in selected blue chips.
"However, persistent foreign selling, a strong US dollar and expectations of further US monetary tightening are likely to cap the upside,” he said.
As such, Thong expects the benchmark index to trade within the 1,650-1,680 range next week, with a sustained move above 1,675-1,680 needed to restore stronger upward momentum.
For the week ended yesterday, US interest rates were raised for the first time in more than three years to 3.75 per cent to four per cent, from 3.5 per cent to 3.75 per cent, while the Bank of Japan raised its policy rate to 1.25 per cent on Friday, its highest level in 31 years.
Brent crude oil, which settled at US$105.68 a barrel on Monday, eased 1.93 per cent to US$102.80 as at 6.50 pm Friday.
On a Friday-to-Friday basis, the FTSE Bursa Malaysia KLCI (FBM KLCI) declined 21.18 points to 1,665.56 at yesterday’s close, from 1,686.74 a week earlier.
On the index board, the FBM Emas Index fell 98.48 points to 12,411.72, the FBM Top 100 Index lost 95.27 points to 12,211.37, the FBM Emas Shariah Index shed 84.82 points to 12,311.99 and the FBM ACE Index slipped 15.63 points to 5,244.60, while the FBM Mid 70 Index gained 115.38 points to 17,844.02.
By sector, the Energy Index advanced 6.19 points to 820.62 and the Plantation Index gained 60.42 points to 9,496.44. The Industrial Products and Services Index, meanwhile, fell 3.54 points to 185.24, while the Financial Services Index declined 209.58 points to 19,412.63.
Weekly turnover fell to 15.02 billion units worth RM14.18 billion from 18.97 billion units worth RM15.53 billion in the previous week.
Main Market volume eased to 9.38 billion units valued at RM12.93 billion, from 11.62 billion units valued at RM13.89 billion previously.
Warrants turnover narrowed to 3.61 billion units worth RM498.33 million, from 4.40 billion units worth RM624.83 million in the previous week.
ACE Market volume fell to 2.02 billion units valued at RM748.59 million, compared with 2.93 billion units valued at RM1.00 billion in the previous week. -- BERNAMA
