Bursa likely to trend lower in cautious trade

BURSA Malaysia is likely to trend lower this week in cautious trading, with the FBM KLCI moving between 1,740 and 1,750 points, as concern over a US possible interest rate increase in December continues to dominate sentiment in the equities market.

Affin Hwang Investment Bank vice-president and head of retail research Datuk Dr Nazri Khan Adam Khan said there is a good chance that the Federal Reserve would increase interest rates in December and this is negative for emerging markets, including Malaysia.

“After breaking its 1,760 support level, the FBM KLCI is expected to test the1,740 level, a 200-day moving average,” he added.

The local market has been seeing a foreign funds outflow over the past few days with interest shifting to neighbouring countries.

“However, the local market is expected to see rotational play from blue-chip stocks to the ACE Market and penny stocks. This is evident in the rise on the ACE Market to a two-year high and technology stocks which increased to a 13-year high.

“The increase in retail participation in these stocks on the local market is expected to cushion foreign outflow,” Nazri Khan said.

Last week, the FBM KLCI slipped 8.68 points to 1,755.32. Total turnover rose to 16.33 billion units valued at RM10.05 billion. – Bernama