The FBM KLCI (+2.5%) rebounded as oversold bargain hunting emerged, aligning with the improved sentiment in regional markets.
While lower liners also saw gains, small-cap stocks rebounded to a lesser extent compared to the key index. All sectors ended in the green, led by Construction (+4.8%) and Property (+4.6%) sectors.
Market Outlook: Oversold bargain hunting
“For today, we expect the market to remain defensive as foreign funds and local investors are likely to stay on the sidelines due to ongoing global headwinds such as potential US recessions and geopolitical tensions between Iran and Israel. Funds may continue rotating from small-cap stocks to blue chips during this period of global market turmoil.
“While we maintain a positive longer-term outlook for the local bourse, we advise investors to be selective at this juncture, focusing on larger-cap stocks and fundamentally sound companies that have dropped below their intrinsic value. Finance and REIT sectors are expected to outperform, being safe havens during this volatility,” says analysts from Apex.
FBM KLCI Technical Review & Outlook
The FBM KLCI formed a bullish candle bounced off SMA200. 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.
Global Markets Review
Wall Street rebounded but gains were capped by lingering concerns of economic slowdown. Similarly, the European market mirrored the US rebound, with the main index gaining a modest 0.2%. Asian stock markets mostly closed higher, led by a strong rebound in Japan’s Nikkei, which saw gains of more than 10%.
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