REVIEW: Bursa Malaysia kicked off the week on a steadier platform, with the FBM KLCI advancing 1.78 points to 1,747.91 amid extended buying post-budget on “feel good” factor.
A firmer US markets and crude oil prices, added to the upbeat mood.
However, the upside potential was capped later as Asian stocks markets turned mixed and was not supportive of the local bourse while investors braced for key earnings reports and US President Donald Trump’s announcement of the new Federal Reserve chair.
In the absence of strong follow-through interest, the key index subsequently moved sideways in mixed mood, fluctuating in a very tight 4.39 points throughout before ending 2.22 points higher at 1,748.35 on Monday.
After a strong rally, the bulls on Wall Street retreated from the peak, as investors took the excuse that reduction of corporate tax in the US may be gradual instead of cutting it all at one go, to book profits.
Meanwhile, uncertainty about US President Donald Trump’s former campaign manager being charged with money laundering further weighed on the sentiment.
Though crude oil prices sustained the upward thrust, most stocks in the Asia-Pacific region traded lacklustrely the next day, tracking a pullback in US equities.
Pending a new lead to emerge, investors at home adopted a cautious stance and despite the the local bourse flirted in the positive territory for most part of the morning session, it suffered a round of unexpected beating in the afternoon due to unfavourable external factor and foreign liquidation pressure in select heavyweights.
However, a late bout of buying by the local institutional players helped trimmed declines significantly.
At the final bell on Tuesday, Bursa Malaysia lost only a small 0.43 of a point to 1,747.92, with winner slightly outnumbering decliners by 459 to 449, thanks to the retail players bidding up the second and lower liners.
Crude oil bulls continued their upward momentum, sending prices to the best level in more than two years amid signs a global glut was shriking, underpinned further by an output restraints by members of the Organisation of the Petroleum Exporting Countries (OPEC) cartel and allies such as Russia.
On Wall Street, a spike in consumer-related shares on the back of better-than-expected quarterly results, along with gains in technology-related issues, lifted the Dow moderately steadier.
As expected, regional markets followed the positive Wall Street and staged a rally, boosted by growing optimism about solid economic growth globally.
In an unprecedented move, Bursa Malaysia’s benchmark FBM KLCI went the opposite route, dragged down by persistent foreign selling in the blue chips, exacerbated by negative corporate news flow domestically, where Ekovest Bhd and Iskandar Waterfront City Bhd announced that they had called off their mergen plans.
In an underperformed situation, the local bourse shed 3.99 points to 1,743.93 on lack of support in mid-week.
Nevertheless, Bursa Malaysia attempted to stage a rebound in early session on Thursday, but there was no catalyst on the horizon to spur buying momentum, with most markets in the region slipping while the bulls paused for a breather.
Taking the cue from an uninspiring regional trend, the key index fell an extra 2.88 points to 1,741.05 in sluggish session.
And yesterday, the local bourse eased 0.12 of a point to 1,740.93 in directionless session eventhough Wall Street logged a new peak overnight.
Statistics: On a weekly basis, the principal index dropped 5.20 points, or 0.3% to 1,740.93 yesterday, versus 1,746.13 on Oct 27.
Weekly turnover was 14.801 billion units worth RM11.303bil, compared with 12.959 billion shares valued at RM10.760bil done previously.
Outlook: Bursa Malaysia was generally range-bound, but with a mild downward bias undergoing consolidation following a moderate relief recovery the prior week.
While overseas share markets were on an uptrend and many indices setting new records, trading on the local bourse was somewhat subdued and underperformed, as persistent capital outflow continued to dampen investors’ mood and derailed the bulls’ numerous attempts to recover the past week.
Apparently, nobody has an idea how much more selling is in the pipeline, or how long liquidation will last, but it is very clear that the landscape of the market has been damanged after the key index violated the 1,750 points level recently and if the present “market depression” is to drag on, another negative breakdown is bound to happen in the near future, thus making it more difficult for the market to come out of the doldrums.
Based on the daily chart, initial support is anticipated at the 1,730 points, of which, a crack will see the lower 1,700 points psychological floor becoming vulnerable.
Technically, indicators are painting a mixed pictogram. While the daily moving average convergence/divergence histogram improved further after issuing a buy call on Tuesday, the weekly peer sustained the downward expansion against the signal line to keep the bearish note, implying the FBM KLCI is likely to fluctuate within a range until a new lead emerges.
To the upside, the key index will encounter significant resistance at the 1,770 points, followed by the 1,800 points barrier.