KUALA LUMPUR: Cautious trading is set to continue on Bursa Malaysia next week, driven by the bearish outlook on the global economy amid rising geopolitical tensions in the Middle East.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said despite Hong Kong's Hang Seng continuing its upward trend, supported by optimism surrounding China's ongoing stimulus measures, most other emerging markets, including Malaysia, remained subdued, mirroring the cautious global mood.

"We remain cautious in our outlook for the local market, as sentiment has temporarily weakened.

"However, with undemanding valuations and stable economic fundamentals, we expect the FTSE Bursa Malaysia KLCI (FBM KLCI) to stay in consolidation mode and trade range-bound next week with an upside bias, awaiting bargain-hunting opportunities," he told Bernama.

He said the market could see a more sustained upward movement if the local benchmark index breaks above key resistance levels, particularly the 50-day exponential moving average (EMA) at around 1,650.

"As such, we anticipate the benchmark index to trend within the range of 1,625-1,640, which represents the support and resistance levels," he said.

UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said despite the rally in Chinese markets, the underlying economic fundamentals remain shaky.

"Geopolitical risks have also escalated, with growing tensions between Israel and Iran unsettling global markets. Concerns over a broader conflict have driven Brent crude oil prices higher, which provided some support to Malaysia's Energy Index," he said.

The local bourse traded mostly lower during the week just ended on selling activities amid concern over the Middle East tensions, despite China's unveiling of fresh stimulus measures. 

On a Friday-to-Friday basis, the FBM KLCI fell 30.12 points to 1,629.97 from 1,660.09 in the previous week.

Across Bursa Malaysia's index board, the FBM Emas Index fell 177.71 points to 12,209.49, the FBM Emas Shariah Index dipped 198.83 points to 12,114.21, the FBMT 100 Index lost 187.60 points to 11,900.57, the FBM 70 Index erased 170.08 points to 17,268.40, and the FBM ACE Index shed 48.53 points to 5,109.52.

In terms of sectors, the Industrial Products and Services Index eased 1.24 points to 176.10, the Energy Index was 35.93 points higher at 892.68, the Financial Services Index slid 275.65 points to 19,190.68. and the Plantation Index trimmed 7.45 points to 7,185.78.

Turnover widened to 16.87 billion units worth RM13.54 billion compared to 16.61 billion units worth RM15.08 billion in the previous week.

The Main Market's volume decreased to 8.30 billion shares worth RM12.11 billion from 8.64 billion shares worth RM13.76 billion last week.

Warrant turnover strengthened to 6.46 billion units worth RM931.70 million from 5.87 billion units worth RM747.19 million the week before.

The ACE Market's volume improved to 2.10 billion shares worth RM491.78 million from 2.08 billion shares worth RM567.43 million previously.