S. Joan Santani
KUALA LUMPUR: Bursa Malaysia closed higher today, supported by gains on energy, healthcare and utilities counters, fuelled by renewed optimism regarding glove manufacturers, positive updates on the KL-SG HSR project and a stronger oil price.
Tradeview Capital fund manager Neoh Jia Man said with a plethora of economic data set to be released next week and the impending Federal Open Market Committee rate decision, the near-term upside for the local market is likely to be limited.
SPI Asset Management managing director Stephen Innes said the week so far has been positive for the local bourse, buoyed by China's reserve requirement ratio (RRR) cuts and the upward trajectory of commodity prices, particularly energy.
"Today, stock prices stabilised as investors prepared for the weekend, but the significant development is that the local index has maintained its crucial support level at 1500.
"Local investors are optimistic about a developing Goldilocks scenario in the US, where economic growth remains steady while inflation recedes," he told Business Times.
Investors are awaiting some key readings on US inflation today and upcoming Federal Reserve meeting to gauge the outlook for interest rate.
This dynamic suggests the possibility of interest rate cuts by the Federal Reserve in the first half of the year, he said.
As a result, the local bourse is receiving an unusual level of support from both Chinese and US markets, contributing to its recent strength and resilience, added Innes.
China's Purchasing managers index data for January is due next week which will provide more cues on business activity at the beginning of 2024.
Meanwhile, Rakuten Trade Sdn Bhd equity research vice president Thong Pak Leng said today's positive outlook was supported by attractive valuations, increase in investor confidence gauging from the higher average daily trading volume and strong foreign buying.
"Nonetheless, we do not discount the possibility of profit taking activities.
"The FBM KLCI staged a rebound and managed to surpass the stiff resistance level of 1,500 on Wednesday," said Thong.
He said on the flip side, the critical support level is set at 1,477, and any breach below this level would prompt a reevaluation of our short-term bullish stance for the benchmark index.
"As such, we anticipate the FBM KLCI to trend within the range of 1,495-1,515 for next week," he added.