KUALA LUMPUR: The domestic market looks unlikely to breach the critical 1,500 psychological level as it inches towards a break for the Lunar New Year holidays.
The local sentiment is expected to stay negative, tracking the external environment as Wall Street retreated for a third straight day on fears Federal Reserve officials will remain committed to further interest rate hikes.
"We expect the sideways trend on the local bourse may turn into a negative biased environment prior to the Lunar New Year holiday after Wall Street extended its slide amid increasing concerns of softer economic activities going forward and the expectation of the Fed’s tone to remain hawkish," said Malacca Securities Research in its market commentary.
The research firm added that continued profit-taking in banks could also exert downward pressure on the benchmark FBM KLCI after Bank Negara surprised the market by keeping the overnight policy rate unchanged at 2.75%.
TA Securities Research also expects trading sentiment to be dampened by the potential got global recession and outlook over interest rates.
It reiterated that index resistance is at 1,500 points while 1,512 and the August high near 1,528, followed by 1,550 and 1,570 are stronger hurdles.
On the lower end of the chart, it sees supports at 1,460 and 1,450 as cushion for downside, with better supports from 1,420 and 1,400.
At 9.05am, the FBM KLCI was up 0.51 points to 1,496.73. There were 128 gainers compared with 116 decliners.
Trading volume was 95.38 million shares valued at RM37.32mil.
Consumer retail stocks remained in the spotlight amid the festive shopping period. Heineken Malaysia rose 50 sne to RM26.84 and F&N was up four sen to RM23.98.
Technology-related stocks continued to lose weight given the sustained fall in the Nasdaq. Hextar Technologies slid 34 sen to RM23.32, MPI dropped 10 sen to RM33 and UWC shed six sen to RM4.12.
Among top actives, Velesto was unchanged at 20.5 sen, CSH was flat at 6.5 sen and ECA rose one sen to 99 sen.