FBM KLCI

• The FBM KLCI edged up 0.28% (4.5 points) to close at 1,594.29 last week. It failed to sustain above the crucial 1,600 level breached on Tuesday due to concerns over Donald Trump's tariff threat, Fed interest rates prospects, and ongoing foreign outflows. The MYR strengthened slightly against the USD, appreciating to RM4.44 from RM4.465 the previous week. Sector performance was mixed, with Utilities (+4.9%) and Health Care (+1.6%) leading gains, while Industrial Products and Construction both declined by 1.7%.
• This week, although the index dipped below the key 1,600 psychological level, a rebound is possible as bargain hunters may capitalize on opportunities following the earnings season, amid generally supportive market sentiment. The sustained upward momentum in U.S. indices suggests continued bullishness, potentially influencing regional markets, including Malaysia. Domestically, no major economic data releases are scheduled. However, the U.S. is set to release several employment reports this week, which could provide investors with insights into the Federal Reserve's December rate decision and impact market direction.
• Technically, The FBM KLCI's formation of a doji candlestick pattern reflects market indecision. However, its rebound near the 50-week SMA (1,582) indicates emerging bargain hunting. The weekly stochastic and RSI, both below the 50 level, suggest room for recovery.
• In short, we expect bargain hunting to emerge this week, though gains may be limited. Key support levels are at 1,582 (50- week SMA) and 1,563 (38.2% Fibonacci retracement), with resistance at 1,600 and 1,611 (13-week SMA).

Source: Kenanga Research - 2 Dec 2024