KUALA LUMPUR: Following yesterday’s rally on the back of the financial heavyweights, the FBM KLCI is expected to succumb to profit-taking pressure after the hawkish comments made by US Federal Reserve chair Jerome Powell to Congress dampened hopes of an end to the current rate hike cycle.
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At the opening bell, the benchmark composite index was down 1.33 points to 1,392.12 as Powell’s confirmation of further monetary tightening sent investors into profit-taking mode.
Overnight, the Dow Jones was down 0.3%, the S&P500 fell 0.5% and the Nasdaq slid 1.2%.
TA Securities Research said trading is expected to stay choppy as concerns over the path of interest rate outlook and a lack of new stimulus from Beijing keep investors on edge.
“Immediate overhead index resistance stays at 1,400, with 1,420, followed by the 200-day moving average at 1,446, acting as stronger resistance levels.
“On the downside, crucial chart supports are at 1,369, then 1,350,” it said in a note.
Malacca Securities Research said uncertainties over the upcoming domestic state elections could continue to weigh on the local bourse, limiting the upside potential on the FBM KLCI.
However, it noted that the gradual improvement in crude oil commodity prices may create buying momentum in the energy sector.
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“Investors may also favour the aviation sector in expectations over higher achievement in aircraft capacity.
“On the flip side, the technology sector may face downward pressure amid mild profit taking activities on Wall Street,” it said in a note.
On the blue-chip index, financial stocks continued to climb, perhaps owing to investors seeking out safer dividend plays.
Mayank rose two sen to RM8.76, Public Bank gained two sen to RM3.93, CIMB was flat at 5.25 and Hong Leong Bank climbed 24 sen to RM18.98.
Press Metal came under pressure following the previous session’s rebound, losing four sen to RM4.72.
On the broader market, top actives included Vinvest down 0.5 sen to seven sen, Classita unchanged at 9.5 sen and Tanco up 0.5 sen to 51.5 sen.
– The Star