Market Outlook: FBM KLCI extended rally and global markets

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The FBM KLCI (+0.59%) extended its rally in tandem with the positive momentum from the global markets. The lower liners advanced, while the utility sector (+1.53%) outperformed among its sectoral peers with only Plantation, REIT and Property sectors closed in the red.

Wall Street ended higher after the release of subdued US payrolls data which fosters stronger expectations for rate cuts. Similarly, both European stock markets and Asia stock market led gains thanks to the softer US job data.

Market Outlook

“Following the extended positive momentum across global market, we expect a positive spillover effect into the local market, largely fueled by the resumption of foreign fund inflow.

“Meanwhile, we expect the improved sentiment may provide further upside for lower liners. Economic wise, investors are now awaiting the release of Eurozone’s PPI and PMI data. Moving forward, the pullback in gold price may present an opportunity for investors to accumulate gold related stocks on expectations that the interest rate cut should provide some support for the bullion.

“We advocate investors exercise caution on the energy sector today on the pullback in crude oil prices. We reckon that tepid job data may signal weakness in economic growth in the US, which is the world’s biggest oil consumer,” says Apex Research.

FBM KLCI Technical Review & Outlook

Technical Commentary: The FBM KLCI formed a bullish candle towards the highest level since April 2022. Indicators stayed positive as the MACD Line trends above the Signal Line, while the RSI is approaching the overbought territory. The local bourse may extend its gains over the interim. Immediate resistance is located at 1,600. Support remains envisaged around 1,530.