Bursa likely to be on cautious mode this week, waiting for new catalysts

KUALA LUMPUR: Bursa Malaysia is expected to be on cautious sentiment this week with the FBM KLCI likely to remain stable until new catalysts emerge.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng expects the benchmark index to trade sideways for the time being until more clarity emerges regarding the anticipated US interest rate cut.

“The hope on Wall Street is still that the Federal Reserve will begin cutting its main interest rate in June,” he told Bernama.

Thong anticipates the FBM KLCI to trend within the range of 1,527 to 1,557 this week.

“The FBM KLCI has remained in the consolidation phase over the past two weeks. Despite the ongoing deeper consolidation, the index has consistently remained above the 50-day exponential moving averages (EMA).

“As such, we maintain our view that the benchmark index is still consolidating with a slight positive bias, with expectations of it hovering around the 20-day EMA,” he said.

Thong believes this consolidation will continue for a while longer, with support levels observed in the range of 1,525 to 1,531, followed by critical support at 1,520 and then 1,508.

On a Friday-to-friday basis, the FBM KLCI eased 6.32 points to 1,536.07 from last week’s 1,542.39. Weekly turnover declined to 14.40 billion units worth Rm11.29bil from 21.24 billion units worth Rm14.16bil the preceding week.

The Main Market volume shrank to 8.85 billion shares worth Rm10.06bil from 13.10 billion shares worth Rm12.35bil a week ago. Warrant turnover decreased to 2.38 billion units valued at Rm332.09mil versus 4.17 billion units valued at Rm563.70mil the previous week.

The ACE Market volume reduced to 3.09 billion shares worth Rm896.65mil from 3.92 billion shares worth Rm1.24bil previously.