KUALA LUMPUR: Malaysia's blue-chip index bounced back on Friday after a steep bout of profit-taking that took 1.5% off its value in the previous session.
The FBM KLCI was up 12.8 points or three-quarters of a percent to 1,743.69 at 9.23am. At the current level, the index has chalked up a respectable gain of 1.3% over the previous week's closing price.
Analysts are expecting traders to take a more cautious approach moving forward as the index seeks out more stable ground.
"We expect the FBM KLCI to trade on a more cautious and consolidative note following recent profit-taking after the strong rally earlier in the week.
"Near-term sentiment has softened as investors adopt a wait-and-see stance after the Federal Reserve kept interest rates unchanged, with Chair Jerome Powell signalling that policy remains “in a good place” for now," said Apex Securities in a note.
"The persistence of elevated gold prices, which continue to trade near record highs, alongside a softer US dollar, suggests ongoing demand for defensive positioning amid geopolitical risks and uncertainty surrounding the global outlook.
"Coupled with the pullback in US equities following megacap earnings, market sentiment is likely to remain cautious in the absence of fresh positive catalysts."
Rakuten Trade, meanwhile, said the heavy selling in the previous round was overdone, owing to concerns from the sell-down in Indonesia regarding free floats among the listed companies.
It noted that a rebound was in the offing as Bursa Malaysia has maintained that its free float is still within the set parameters and has no systemic risks with MSCI requirements.
On the ticker board, heavyweight banks, which had been the main driver of gains on the FBM KLCI, rebounded strongly, reflecting investor preference for the defensive plays.
Maybank gained eight sen to RM11.72, CIMB rose 15 sen to RM8.62, Hong Leong Bank jumped 30 sen to RM24.62, RHB added 11 sen to RM8.21, Public Bank gained four sen to RM4.89 and Ambank climbed five sen to RM6.49.
Among active counters on the market, Dnex dropped 1.5 sen ot 30.5 sen, Pharmaniaga
rose 0.5 sen to 29 sen and Capital A gained 0.5 sen to 64 sen.
