Market expected to trade sideways post-CNY reopening

KUALA LUMPUR: The domestic market is expected to remain subdued for the remainder of the week as the corporate news flow gradually restarts after a Lunar New Year break.

Bursa Malaysia was off to a mildly positive start on Wednesday after its extended holiday with the benchmark FBM KLCI opening up 1.3 points at 1,501.3.

The market was overall positive with 201 gainers compared with 62 decliners.

Kenanga Research forecast the market could benefit from Wall Street's strong performance over the last three trading sessions as Bursa Malaysia played catch-up to developments.

"Kicking off the week, sentiment may get a lift in response to Wall Street performance since last Friday, which saw the DJIA (+2.1%), S&P500 (+3.0%) and Nasdaq (+4.4%) rising during the period," it said in its weekly technical review.

However, it added that the Malaysian bourse is expected to carry on the consolidation pattern during this quiet week before resuming its downward bias.

It said the FBM KLCI could hover around the 1,500 psychological level for the time being following the negative technical signals arising frmo the benchmark index's ongoing adjustment from the upper Bollinger Band and the stochastic indicators unwinding from an overbought zone.

"With the calendar of events looking empty for this holiday-shortened week, investors may want to keep their eyes overseas for possible market leads.

"Thus, the FBM KLCI could range-bound between our immediate support and resistance thresholds of 1,475 and 1,510 with its downside risk still outweighing upside potential going forward," it said.

Historically, the research firm said the Year of the Rabbit has been a mixed bag of stock market returns.

"During the past three cycles when the bunny made its appearance, the FBM KLCI either slipped marginally (down by 2.9% in 1987 and 0.6% in 2011) or leaped strongly (as was the case in 1999 with a handsome gain of 67.8%)," it said.

Among individual counters, there was some positive movement in technology counters.

MPI rose 86 sen to RM34.30, Hextar Technologies gained 54 sen to RM24.24 and Frontken gained nine sen to RM3.39.

Brewer Heineken Malaysia remained buoyant, rising 32 sen to RM27.24, while Carlsberg rose 16 sen to RM23.30.

Top actives were NationGate rising two sen to RM1.20, Cypark rising nine sen to 78 sen and Jade Marvel adding one sen to 31.5 sen.