KUALA LUMPUR: Bursa Malaysia opened higher today as bargain hunters resurfaced to take advantage of the dip yesterday ahead of positive developments in China and the US improving market sentiment.
The FTSE Bursa Malaysia (FBM KLCI) opened 3.3 points higher at 1,399.53 versus 1,396.23 points on Thursday's close. At 9.30am today, the broader market was positive with gainers led losers 312 to 172 while 283 counters were unchanged.
Turnover was at 649.307 million shares valued at RM212.286 million.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said back home, the FBM KLCI failed in its bid to close above the 1,400 level amid some late profit taking.
Nonetheless, we reckon buying activities to re-emerge today in view of the positive developments in China and the US which should improve market undertone. "Therefore, we expect the index to hover within the 1,395-1,405 range with buying interests to centre on tech related companies and the oil and gas (O&G) sector as the Brent crude is currently trending towards the US$82 per barrel level due to improving demand," he told the New Straits Times.
Thong also said the Wall Street maintained its uptrend following the release of the producer price index which came in lower than expected fueling optimism that the Fed may cool down rate hike later this month as we enter the second quarter of 2023 (2Q23) earnings season.
He said as such, the Dow Jones Industrial (DJI) average rose 48 points while the Nasdaq surged by 220 points as the US 10-year yield declined further to 3.77 per cent.
He added that in Hong Kong, the Hang Seng Index (HSI) jumped by 490 points as sentiment improved following China's pledge to enhance support for major tech companies following a meeting that include Alibaba, Meituan and ByteDance.
Meanwhile, Hong Leong Investment Bank (HLIB Research) said the successful downtrend line breakout, waning US dollar strength coupled with easing foreign outflows, following its all-time low foreign shareholding, could spur the index higher towards 1,404, 1,412, and 1,422 levels.
It highlighted however that cautious sentiment is likely to prevail as investors recalibrate prevalent risk of global economic slowdown as global central banks remain in tightening mode, US-China tensions, expectations of another lacklustre 2Q23 results season, as well as rising political risk premium ahead of the upcoming six state polls on August 12.