Bursa Malaysia likely to be on consolidation mode this week

KUALA LUMPUR: Bursa Malaysia is expected to be on consolidation mode this week amid increasing market risks, elevated volatility in global markets, and escalating geopolitical tensions.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng anticipates the benchmark index to further consolidate until new catalysts emerge.

“We strongly advise investors to exercise caution in light of increasing risks in the global market. We expect the benchmark index to enter a consolidation phase and establish a base in the short to mid-term.

“However, a close below the 50-day Exponential Moving Average could indicate potential weakness ahead,” he told Bernama.

Consequently, Thong expects the FBM KLCI to fluctuate within the 1,528 to 1,560 range next week, with immediate support at 1,520, followed by 1,508.

Meanwhile, SPI Asset Management managing director Stephen Innes expects the sentiment on the local bourse to be cautious with a slight positive bias following the latest Malaysia economic data.

According to the Statistics Department, Malaysia’s economy is forecast to have grown by 3.9% in the first quarter of 2024 based on advance estimates, compared with 3% in the previous quarter, spearheaded by the services sector.

“Malaysia’s economy rebounded, marking the most robust growth in a year and signalling a strengthening recovery.

“While this positive local data could provide some upward momentum, it is likely that markets will remain preoccupied with the Mid-East risks amid ongoing hawkish rhetoric from the US Federal Reserve. This could potentially constrain any appetite for upward moves in the markets,” he said.

He added that the attention has shifted to the release of first-quarter gross domestic product data for the United States this week. On a Friday-to-Friday basis, the FBM KLCI eased 3.47 points to 1,547.57 from last week’s 1,551.04.

Weekly turnover surged to 21.21 billion units worth RM15.66bil compared with 11.31 billion units worth RM7.39bil in the preceding week.

The Main Market volume jumped to 12.51 billion shares valued at RM13.95bil from 5.96 billion shares valued at RM6.39bil a week ago.

The ACE Market volume improved to 3.27 billion shares valued at RM1.04bil against 2.17 billion shares valued at RM639.45mil previously.

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