REITs and Financials are preferred due to persistent external uncertainties

The FBM KLCI and broader local market remain weighed down by external risks, with trading expected to be cautious and subdued ahead of the mid-week Chinese New Year break and key US economic data releases. Investors are likely to stay on the sidelines as they await the US Federal Reserve’s interest rate decision, US GDP and inflation data, and China’s economic updates.

Sector Focus: REITS and Financials

Defensive sectors like REITs and Financials are preferred due to persistent external uncertainties. Utilities and Construction may see continued selling pressure, particularly impacted by declines in YTL and YTLP and concerns over AI chip import restrictions.

Technical Outlook: The FBM KLCI continues to trend downward, forming a bearish candle near the lower Bollinger Band. Indicators remain negative, with the MACD below the Signal Line and RSI under 50. Key resistance stands at 1,600, while immediate support is around 1,530.