KUALA LUMPUR: Volatility has returned to the domestic market following the recent interest rate hike by Bank Negara and key global central banks.
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“The week just ended saw monetary policymakers – led by the US Federal Reserve, European Central Bank and Bank Negara Malaysia – raising key interest rates (by 0.25% each) while the US banking sector was hit by a confidence crisis triggered by bank failures (the latest being First Republic Bank),” said Kenanga Research in its weekly review.
While the FBM KLCI ended the past week at an intra-week high of 1,431 on Friday, there was a broader market weakness with falling counters outnumbering rising ones in two of the three working days.
For the week ahead, a strong showing on Wall Street last Friday is likely to help prop up short-term sentiment on Bursa Malaysia.
The market was off to a positive start on Monday as the benchmark FBM KLCI gapped up 1.26 points to 1,432.3.
Kenanga noted that investors will also be keenly watching out for the release of Malaysia’s first-quarter economic result on Friday.
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“Hopefully, investor sentiment (and trading activity) will pick up post the holiday-shortened fortnight,” added the research firm.
Chart-wise, Kenanga said the key FBM KLCI may pull back deeper in view of the stochastic indicator’s ongoing reversal from an overbought position with the bellwether’s further progress likely to be blocked by an intermediate descending trendline and the 50-day SMA.
“This suggests that the FBM KLCI could show a negative bias ahead, possibly backing off from our first resistance hurdle of 1,440 while our immediate support threshold remains at 1,395.”
Some early gainers included Kuala Lumpur Kepong rising 22 sen to RM21.72, MPI adding 20 sen to RM27.20 and Salutica climbing 10 sen to 72.5 sen.
Meanwhile, IGB REIT was seen sliding nine sen to RM2.7 while Duopharma dropped five sen to RM1.41 and YNH Property slumped 16 sen to RM5.04.
Top actives included Hong Seng unchanged at 12 sen, Vinvest up one sen to 21 sen and Sapura Energy flat at four sen. – The Star