KUALA LUMPUR: Bursa Malaysia finished the week with a slight dip but maintained its position above the critical 1,600 level for the fourth consecutive day.
At 5pm, the FBM KLCI declined 0.03 per cent or 0.55 points to 1,600.67 compared to Thursday's close of 1,601.22.
The benchmark index, starting stronger at 1,603.46, later dipped to a low of 1,599.84 in the final trading hours, having reached a peak of 1,604.07 earlier in the day.
On the broader market, gainers outnumbered decliners 601 to 538, while 494 counters were unchanged.
Rakuten Trade equity research vice-president Thong Pak Leng said the FBM KLCI remains in consolidation mode following the recent uptrend.
He believes that the long-term outlook of the local market remains positive, driven by strong corporate earnings, cheap valuations, and substantial support from foreign investors.
He said the firm consider this a positive correction, while the benchmark index is in a consolidation phase following recent gains.
"It enables the market to absorb the recent uptrend, presenting an advantageous opportunity for stock accumulation at reduced levels.
"To recap, the FBM KLCI has sustained its rally, breaking the 1600 mark for the first time in two years.
"While we anticipated a temporary pause in bullish activity after such a strong surge, the index remains positioned above all exponential moving averages (EMAs).
"The upward trajectories of the 20-day and 50-day EMAs indicate that the KLCI is consolidating with a positive bias," he told Business Times.
Therefore, Thong anticipates the index to fluctuate within the 1,600–1,620 range next week.
He added that any retracement is likely to find support around the 1,576–1,589 levels, maintaining the bullish momentum.
Meanwhile, Thong said key regional indices ended mostly higher, buoyed by the improved US labour market conditions and a weakened dollar.
He noted that this boosted confidence in potential interest rate cuts this year, ahead of next week's pivotal inflation data.
"The focus of the markets will be on the April US producer price index (PPI) and consumer price index (CPI) reports set to be released next week, as analysts seek clues regarding whether inflation is reverting towards the Federal Reserve's two per cent target rate," he said.