• The FBM KLCI closed the week with a marginal gain of 0.06% at 1,441.90. Bargain-hunting activities were observed, driven by buying interest in sectors like Utilities, Construction, Property, and Financial Services, primarily supported by local investors amidst increasing global market volatility. Ringgit continued to weaken against the USD, briefly reaching RM4.7925 before settling at RM4.776.

• Despite higher volatility in the US, the FBM KLCI showed resilience against the trend. However, its outlook for the upcoming week appears bearish-bias due to the absence of significant short-term domestic catalysts. Indeed, the local index's trajectory is likely contingent on the decisions of both the local central bank and the Fed, which are expected to shape the direction of both stocks and bonds for the remainder of the year.

• Looking at the technical aspects, the immediate outlook for the FBM KLCI is somewhat uncertain after forming a 'Doji' chart pattern in its weekly chart, indicating indecision in the market.

• We expect the index to range between 1,428 and 1,446 as we await guidance on future interest rate directions from central banks. Failure to maintain this range may result in consolidation towards the 1,417 level. Conversely, a decisive break above the immediate resistance at 1,445 could potentially lead to a retest of the recent high at 1,465.

Source: Kenanga Research - 30 Oct 2023