KUALA LUMPUR: Bursa Malaysia is expected to extend its consolidation mode with a downside bias next week, amid lingering concerns over the United States' (US) weaker-than-expected economic growth and higher unemployment.
Apex Securities Bhd head of research Kenneth Leong said investors will be keeping a close tab on ISM Services Purchasing Managers' Index (PMI) data in the US next Monday.
"Back home, the key focus will be centred on the Volume Index of Wholesale & Retail Trade for the second quarter of 2024 (Aug 8), as well as the Industrial Production Index and Labour Force Statistics for June 2024 on Aug 9.
"We expect the downside risk to prevail in the absence of fresh catalysts, while external factors may continue to bog down the key index performance," he told Bernama.
He said technically, the FBM KLCI has formed another bearish candle as the FTSE Bursa Malaysia KLCI (FBM KLCI) took another step back towards 1,600 points on Friday.
"We maintain our downward bias projection on the FBM KLCI as the key index looks to trend towards the near-term support of 1,580. Resistance is spotted at 1,630," he added.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng concurred that Bursa Malaysia is likely to stay in consolidation mode, but with an upside bias next week as the long-term direction of the local market remains positive.
From a technical perspective, the benchmark index continued its retracement, closing below the 20-day exponential moving average (EMA), and he expects market volatility to persist with the FBM KLCI fluctuating around the 20-day EMA.
"Despite this short-term consolidation, the longer-term trend remains upward as the index is still above the 50-day EMA. Therefore, we anticipate the benchmark index will fluctuate within the 1,600-1,630 range next week, with immediate support at 1,600, followed by 1,592," he added.
On a Friday-to-Friday basis, the FBM KLCI eased 1.83 points to 1,611.05 from last week's 1,612.88.
During the week, Bursa Malaysia traded mostly lower due to major central bank decisions, key economic data, and earnings announcements from US mega-cap companies.
The slowing economic growth in the US, expectations of another rate hike in Japan, and the rising geopolitical tensions in the Middle East recently also weighed on sentiment.
The US Federal Reserve kept its interest rates unchanged while signalling potential easing in September if inflation subsides.
The Bank of Japan on Wednesday raised its benchmark interest rate to around 0.25 per cent, its highest level since 2008. The market is expecting another rate hike by the end of the year.
According to the US Labour Department's Bureau of Labour Statistics, the unemployment rate rose to 4.3 per cent in July, and nonfarm payrolls edged up by 114,000 jobs compared to a revised 179,000 in June.
On Bursa Malaysia's index board, the FBM Emas Index dipped by 160.23 points to 12,303.50, the FBMT 100 Index dropped 130.61 points to 11,919.95, the FBM Emas Shariah Index declined 293.00 points to 12,448.15, the FBM 70 Index fell 627.35 points to 17,902.80, and the FBM ACE Index decreased by 323.68 points to 5,470.41.
Sector-wise, the Financial Services Index edged up 259.67 points to 18,231.59, the Industrial Products and Services Index shed 6.35 points to 185.5, the Energy Index slid 36.98 points to 929.15, and the Plantation Index inched down 0.58 of-a-point to 7,143.61.
For the week just ended, turnover eased to 21.51 billion units valued at RM16.31 billion versus 23.24 billion units valued at RM15.63 billion in the preceding week.
The Main Market volume edged up to 12.65 billion shares worth RM14.54 billion against 12.38 billion shares worth RM13.40 billion a week ago.
Warrants turnover dropped to 5.16 billion units valued at RM650.71 million from 6.10 billion units valued at RM745.77 million last week.
The ACE Market volume declined to 3.65 billion shares worth RM1.11 billion from 4.75 billion shares worth RM1.48 billion previously.
– BERNAMA