Lower liners finished in the red

The FBM KLCI (-0.1%) ended marginally lower after two days of oversold recovery. Lower liners also finished in the red, mirroring the weak performance of the US market. The Telecom (+0.5%) sector emerged as the top gainers, while Construction (-1.5%) and Utilities (-0.7%) sectors were the top decliners as profit-taking emerged.

Global Markets Review. Wall Street surged with a strong rebound overnight, as recession fears eased following better-than-expected jobless claims data, indicating improved job market conditions after last week’s unexpectedly high unemployment rate. European market ended mixed, with main index closing just +0.02% higher, while Asian markets mostly closed lower, mirroring the earlier performance of the US market on the release of Japan’s trade data and India’s monetary policy decisions ahead.

Market Outlook. On the global stage, concerns on U.S. recession have eased, leading to a strong rebound on Wall Street. We anticipate that this positive sentiment will spill over into the local bourse today, driven by the expected return of foreign funds. Additionally, news of direct domestic investment by the six government-led GLICs is likely to further bolster market sentiment. However, the upside could be limited as investors might stay on the sidelines, given that today is the last trading day of the week, with many awaiting the upcoming corporate results season and the release of more US economic data next week. We expect improve sector performance in Construction, Utilities, and Technology today, as these sectors remain the preferred choice of foreign investors.

FBM KLCI Technical Review & Outlook

The FBM KLCI staged a minor pullback after recovering most of its intraday losses yesterday. Indicators, however, remained negative as the MACD Line treaded below the zero level, while the RSI remain below 50. Immediate resistance is located at 1,600. Support is envisaged around 1,530.