KUALA LUMPUR: The FBM KLCI rebounded at Tuesday's open after four straight days of declines, but gains are expected to be capped ahead of the US Federal Reserve's decision on the lending rate this week.
With market's pricing in a high likelihood the US central bank will slash the Federal deposit rate by a quarter-percentage point, any decision to hold steady or raise the cost of lending will serve as a shock to global markets.
At present, CME FedWatch has pegged an 87.3% probability of a 25 basis points reduction in the rate, and 12.7% odds of the Fed holding still.
The uncertainty, however, is weighing on the local market. The benchmark index rose 6.36 points to 1,619.14 at the starting buzzer, but minutes later, retraced lower to just a fraction above the reference price, indicating strong profit-taking pressure.
"Rangebound trade with a downside bias should persist as investors refrain from major trading commitments as they await the U.S. Federal Reserve's upcoming interest rate decision," said TA Securities in its market commentary.
"Immediate support is maintained at the 61.8%FR (1,564), with stronger supports seen at the 50%FR (1,527) followed by the 38.2%FR (1,490). Immediate resistance is kept at the December 2024 high of 1,644, with the highs of 1,684, and 1,695 acting as tougher upside hurdles."
Rakiten Trade said the recent downtrend on the domestic market was owing to cautious sentiment amid the net outflow of foreign funds.
"Despite the steady ringgit, which is hovering at 4.11 vs the US dollar, investors remain unconvinced hence not committing themselves as yet. For today, we expect the index to hover within the 1,610-
1,620 range," it added.
Among individual stocks, notable gainers included Sunway Construction, rising six sen to RM5.97, Sunway adding six sen to RM5.64 and RHB Bank
gaining four sen to RM7.29.
Topping the actives list, clean petroleum product (CPP) tanker operator Orkim Bhd’s shares opened flat at 92 sen, matching its initial public offering (IPO) price on its debut on the Main Market.
Other actively traded shares included JS Solar up 1.5 sen to 30 sen and capital A up one sen to 40.5 sen.
