The FBM KLCI will likely consolidate lower next week due to more negative cues from the global market performance.

Vice-President, Head of Retail Research, Affin Investment Bank, Dr Nazri Khan, said global markets are slowly factoring in short-term unfavourable factors following a new fiscal concern in Europe (Spain and France) and a flurry of weak USA economic data.

"Following the breakdown of 1,600 psychological support level, we believe the FBMKLCI will pull back lower to test April 2012 low near the 1,580 level," he said.

During the week, the FBM KLCI pulled back from the 1,600-level to close at 1,591.85 on Friday, dragged by weak market sentiment following losses in global markets.

The FBMKLCI breached the 1,600-level on April 2.

"We also expect the local benchmark to be weaker, dragged by softer currency and commodity markets," he said.

Nazri also reckoned that investors will be using the FBMKLCI's near 22 per cent surge since its September 26, 2011 trough as an excuse to pare positions.

Some investors, according to him, may even take the dovish tone of many global central banks as signals that the global economy may be more challenging than many have realised.

This, he said, follows India's and Brazil's bigger-than-expected interest rate cut to multi-year historic lows.

"Given a number of external event risks, we reckon volatility is likely to remain elevated for the time being.

"Going forward, however, the local situational and rotational theme such as the upcoming mega Initial Public Offering or IPO of Felda and Integrated Healthcare as well as Asean champions (local multinationals on Asean integration such as CIMB and Airasia) will cushion any decline to continue driving interest," he said.

On a Friday-to-Friday basis, the FBM KLCI lost 11.27 points to 1,591.85 from 1,603.12 last Friday.

The Finance Index lost 109.02 points to 14,229.05 from 14,338.07 last Friday.

The Industrial Index eased 6.38 points to 2,862.90 from 2,869.28 last Friday.

The Plantation Index declined 45.30 points to 8,798.03 from 8,843.33 last Friday.

The FBM Emas Index declined 75.15 points to 10,919.22 from 10,994.37 last Friday.

The FBM Ace Index rose 82.82 points to 4,618.71 from 4,535.89 last Friday.

The FBM Mid 70 Index eased 90.66 points to 11,995.74 from 12,086.4 last Friday.

The FBMT100 Index lost 76.88 points to 10,716.83 from 10,793.71 last Friday.

Total weekly volume increased to 8.602 billion shares valued at RM7.534 billion from 4.638 billion shares, valued at RM5.913 billion last week.

Main market turnover increased to 4.388 billion shares valued at RM6.789 billion, from 3.132 billion shares valued at RM5.673 billion last week.

Volume on the ACE market increased to 3.468 billion shares worth RM618.986 million, from 1.126 billion shares worth RM177.983 million last week.

Warrants increased to 582.032 million units worth RM117.978 million, from 365.327 million units worth RM55.33 million last week. -- Bernama