Foreign funds are likely to continue be the net seller

Local sentiment remained cautious following the recent volatility.

“We expect the index to remain choppy in the near-term, following subdued momentum and weak recovery signals, in view of the softer global market performance with the key index attempt to defend the 1,600 psychological level.

Foreign funds movement

“The lower liners may also see a muted trading activity on the back tepid trading sentiment as we march into the mid-week festive break.  Foreign funds are likely to continue be the net seller on the local bourse, as slower rate cuts by the US Fed could strengthen the USD, prompting funds to flow back to the US,” says Apex.

Sector focus. Financial stocks have seen a hard time, following rate cut implications – we suggest investors steer clear of this in the short term. The resiliency in USD may garner trading interest within export-oriented sectors such as Technology, Gloves, Timber and Furniture. 

Technical Commentary: The FBM KLCI formed a bearish candle to wipeout all its previous session gains as the key index rejected SMA200 and drifted further from the 1,600 level. Indicators turned negative as MACD Line slipped below the Signal Line, while the RSI lingered below 50. Immediate resistance is located at 1,625. Support is envisaged around 1,570.

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