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FBM KLCI expected to consolidate further

KUALA LUMPUR:  Facing a lack of local catalysts and ongoing external uncertainties, the FTSE Bursa Malaysia (FBM) KLCI fell by 13.9 points to 1,618.30 last week, registering its fifth consecutive drop.

Hong Leong Investment Bank Bhd (HLIB Research) noted the benchmark index was down 27.7 points week-on-week, driven by sell-offs in YTL Power International Bhd, YTL Corporation Bhd, Public Bank Bhd, Celcom Digi Bhd, and Maxis Bhd. 

"The bearish trend may increase the odds of a deeper consolidation towards 1,600-1,607 territory, with a more solid floor identified at 1,589 region," it said in a note. 

Market breadth was negative at 0.54 with lower trading volume, which was down 6.8 per cent to 2.47 billion shares while value dropped 6.1 per cent to RM2.14 billion. 

Local institutions and local retailers were the major net buyers, while foreign institutions emerged as sole net sellers. 

"In wake of upcoming third quarter local results season, foreign net outflows, bearish technical readings coupled with sluggish leads from Wall Street, the KLCI is likely to consolidate further (support: 1,600-1,607; resistance: 1,625-1,638-1648) in the near term. 

"Moreover, the outlook 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 added.

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