KUALA LUMPUR: Bursa Malaysia is poised to retest the 1,670 level this week on improved sentiment with the latest US jobs data pointing to a softening labour market, keeping hopes for an interest rate cut elevated.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said that while the latest US non-farm payrolls report showed a lower-than-expected increase of 142,000 jobs last month, the recent jobless claims report from there showed a decline to 227,000 from 232,000.
This suggested that layoffs remained low and that the American labour market slowdown was orderly.
“Despite the mixed US economic data, recession concerns seem overstated,” he said in view of a gradual improvement in market sentiment as the week progresses.
He added that this week’s domestic market setback offers a compelling buying opportunity due to more attractive valuations. However, he said investors should remain aware of the market’s heightened sensitivity to US economic data.
“The market now expects a significant 50 basis points rate cut this month, based on CME Fed Watch data following the non-farm payrolls report. Any deviation from these expectations could trigger volatility,” he warned. In this context, he expects a shift in investor focus towards fundamentally strong companies with high dividend yields and defensive sectors.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said from a technical standpoint, the 20-day and 50-day exponential moving averages (EMAs) are both trending upward, with the index staying above them.
This signals a continued bullish trend in the short and medium term, though the proximity to the 20-day EMA hints at potential consolidation.
“As such, we anticipate the FBM KLCI to trend within the range of 1,650 to 1,670 for this week with immediate support at 1,650 followed by 1,630 and resistance at 1,670 followed by 1,700,” he said.
Bursa Malaysia traded in the red for the whole week as the softening US labour market also sparked concerns about the outlook for the global economy.
Meanwhile, Bank Negara kept the overnight policy rate unchanged at 3%, providing some support to key heavyweights mainly financial counters. On a Friday-to-Friday basis, the FBM KLCI lost 25.68 points to 1,653.12 from last week’s 1,678.80.
On Bursa Malaysia’s index board, the FBM Emas Index lost 208.20 points to 12,276.06, the FBMT 100 Index erased 110.37 points to 12,077.25 and the FBM Emas Syariah Index shrank 301.46 points to 11,985.21. — Bernama
