FBM KLCI inches higher as OPR decision looms

KUALA LUMPUR: The FBM KLCI ended the morning session higher as investors look ahead to Bank Negara's overnight policy rate (OPR) decision tomorrow.

According to a Bloomberg poll, two economists expect no change to the OPR at 2.75%.

RHB Investment Bank expects the central bank to hold the OPR at 2.75% at the meeting.

The research house maintained its peak OPR forecast of 3.25% with the balance of risks tilted towards a print of 3% and the Bloomberg consensus peak OPR estimate being 3%.

RHB also expects first quarter gross domestic product (GDP) to print 4.2% year-on-year (y-o-y).

At midday, the market bellwether advanced 5.21 points to 1,421.16 buoyed by gains in banking stocks.

Winners and losers were closely balanced, with 350 gainers against 359 losers and 356 that were flat. Volume was 1.75 billion shares, valued at RM717.4mil.

F&N jumped 34 sen to RM26.86, APB Resources rose 20 sen to RM1.39, Time Dotcom gained 17 sen to RM5.66 and Hong Leong Bank climbed 14 sen to RM20.28.

Among the losers, Hextar Technologies shed 50 sen to RM22.90, Kuala Lumpur Kepong fell 30 sen to RM21.20, PETRONAS Dagangan eased 22 sen to RM22.42 and Batu Kawan lost 18 sen to RM21.60.

Rakuten Trade reckoned some accumulation of stocks to emerge today and expect the index to trend higher after being stuck in a tight range over the past three days.

“Therefore, we anticipate the index to trend within the 1,415-1,425 range today as we enter into corporate results season this month. Plantation counters may continue to see some headwinds as the crude palm oil price dips to a year-to-date low at below the RM3,400/tonne level,” it said.

Hong Leong Investment Bank said the FBM KLCI is expected to lock in sideways consolidation mode on the back of the high-profile Bank Negara, Federal Reserve and ECB policy decisions coupled with a holiday-shortened week.

“Other key events to watch out in May are ongoing US 1Q23 earnings season, Bursa Malaysia results season, escalating geopolitical tensions, continuous foreign net outflows, and upcoming six states’ elections (estimated in June/July).

“Key supports are pegged at 1,384-1,391-1,400 while resistances are situated near 1,427-1,438-1,456 levels,” it added.