Market pulls lower from 1,500 level

KUALA LUMPUR: Domestic developments will be in focus in the coming week as investors watch for clues over the state of the Malaysian economy while corporate earnings results will drive individual stock price performances.

Scheduled for release this week, the December Industrial Production index will be out later today while the 4Q22 economic report is due on Friday.

At the opening bell today, the FBM KLCI fell 2.65 points to 1,487.82, in line with the weak performance in the US market overnight as bond yields rose and investors took profit from a hot start in January.

There was an overall weakness on Bursa Malaysia with 330 decliners compared with 141 gainers.

Some notable laggards included Hextar Technologies down 40 sen to RM28.60, MPI falling 36 sen to RM34.36 and KOtra sliding 20 sen to RM6.

MYEG slumped 30 sen to 65.5 sen following news that it would no longer handle immigration services and processes for the government by 2025.

The stock was the top traded on the market with 1.64 million units exchanging hands in the first 15 minutes of trading.

Blue chips on the slide included PETRONAS Dagangan falling 26 sen to RM22.24, Nestle dipping 20 sen to RM135.40 and IHH shedding 13 sen to RM5.90.

Kenanga Research noted in its market outlook that investors may be on the lookout for probable winners and losers following the sharp reversal of the ringgit versus the US dollar.

"From a recent peak of RM4.75 per USD in early November last year, the Malaysian currency has strengthened 10.3% to RM4.26 per USD currently (in tandem with the greenback’s depreciation of 9.4% versus a basket of 10 leading global currencies since late September last year).

"Broadly speaking, a stronger Ringgit will likely benefit listed companies with high import costs or foreign debt holdings but may be a bane for exporters due to erosion in price competitiveness," it said.

The research firm said from a charting standpoint, the FBM KLCI will likely back away further form the 1,500 psychological market after struggling to sustain its positive momentum.

It highlighted the negative technical signals arising from the FBM KLCI's reversal from the upper Bollinger band, the stochastic indicator's unwinding from an overbought position and the prevailing Parabolic SAR downtrend.

Kenanga's immediate support threshold stands at 1,475 while its first resistance is pegged at 1,510.

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