Bursa Malaysia ends above key 1,600 level buoyed by bargain hunting

KUALA LUMPUR: Bursa Malaysia rebounded yesterday with the key index closing firmly above the key 1,600 support level, propelled by bargain hunting after Tuesday’s steep fall.

At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) settled 12.24 points higher at 1,611.43 as traders actively picked up beaten down counters including heavyweights and lower liners.

The benchmark index opened 2.24 points higher at 1,601.43 from Tuesday’s close of 1,599.19, and moved between 1,601.04 and 1,617.43 during the day.

Gainers trounced losers 599 to 276 with 350 counters unchanged, 686 untraded and 24 others suspended.

Turnover, however, decreased to 2.55 billion shares valued at RM2.12 billion from 2.82 billion shares valued at RM2.46 billion on Tuesday.

Phillip Capital Management, Asia-Pacific, senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said short-term technical outlook suggested that the FBM KLCI was in a deeply oversold situation and should have had a corrective rally.

“We have expected the index to stage an oversold rebound following a respite on the trade tensions as US President Donald Trump had said the trade spat should hopefully end in ‘three or four weeks’, which restores calm among the investors,” he told Bernama.

The immediate resistance was spotted at around 1,650 points, followed by 1,700 points, he said.

Nazri Khan said the the current weakness also represented a good buying opportunity for local stocks as there were no signs of slowing down in Malaysian trade volume despite the two-month US-China trade tensions.

“So far, Bursa Malaysia shows a moderate impact from the trade standoff between the US and China, although the unresolved tension could pose a broader economic war.

“The current situation shows that the uncertain market environment has led investors to reduce their investment portfolio,” he said, adding this was especially so after the US raised tariffs on US$200 billion worth of Chinese goods last week.

He said the banking sector is likely to absorb the immediate impact, as banks need to adjust their deposit and loan rates. “From the fundamental perspective, a temporary drawdown in earnings in the banking industry is likely to happen.”

Despite the weakening ringgit, some sectors are still showing resilient attitude against the bears, which will indirectly lift up investors’ sentiment.

Meanwhile, the commodity sector shows price stability at around US$70 to US$75 per barrel for the crude oil.

“This gives positive impact to countries that produces oil like Malaysia,” he added.