KUALA LUMPUR: FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to consolidate further in the short term amid a lack of meaningful rerating catalysts from the 2025 Budget and a sluggish lead from Wall Street overnight, said Hong Leong Investment Bank Bhd (HLIB Research).
The research firm said Asian markets were weak as investors weighed China's stimulus plans to revive its ailing economy and ongoing United States' (US) third quarter results season coupled with Japan's general election this Sunday.
It added that the sentiment was further weakened by the rising US Treasury yields and uncertainty over the US elections on November 5.
"Moreover, the outlook (of FBM KLCI) may be tempered by external risks, including the potential for a wider Middle East turmoil, a contentious US election given the sharply divergent trade priorities between Harris and Trump, and uncertainties surrounding China's stimulus measures and its economic recovery plans," it said in a research note.
HLIB Research noted that the Dow plunged 430 points to 42,515, as sentiment was jolted by a soaring 10-year bond yield, up four basis points to 4.25 per cent, amid bets that the US Federal Research will take a more measured approach on rate cuts as a resilient US economy and an expansionary fiscal policy magnified concerns of stubborn inflation.
"Sentiment was also dampened by growing bets that Trump's presidential victory could stoke higher inflation given his campaign pledges (such as high tariffs and tax cuts), as well as a mixed batch of third quarter results," it added.
HLIB Research said FBM KLCI slipped one point to 1,641.5 to record its third consecutive decline following a lack of meaningful rerating catalysts from the 2025 Budget and external woes.
However, it noted that the market breadth turned positive on Wednesday at 1.20 from 0.61 on Oct 21, alongside higher trading volume that jumped 21 per cent to 3.23 billion shares while the value rose 6 per cent to RM2.64 billion