KUALA LUMPUR: Bursa Malaysia is expected to trade within a narrow range on cautious mode amid geopolitical uncertainties, says an analyst.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said geopolitical uncertainties, particularly Japan’s upcoming general election and the US presidential election would weigh on market sentiments.
“The outcome of Japan’s election may alleviate some regional uncertainty as it could have significant implications for the Bank of Japan’s (BoJ) monetary policy.
“The BoJ’s recent rate hike to 0.25% has already increased borrowing costs, diminishing the appeal of yen-denominated carry trade and contributing to a broader decline in global stock markets.
“Given current regional and global uncertainties, we anticipate the FTSE Bursa Malaysia KLCI (FBM KLCI) to trade within the 1,640 to 1,645 range in the coming week,” he told Bernama.
However, Mohd Sedek remains optimistic that sectors such as technology, construction and consumer products will continue to experience growth.
Meanwhile, the selling pressure in utilities this week is likely to attract bargain hunters, presenting potential investment opportunities, he said.
Additionally, a shift in central banks’ policy tones globally could benefit Malaysia’s technology and small-cap sectors.
“A quarter-point rate cut by the US Federal Reserve is anticipated next month, although expectations for an additional reduction in December have moderated.
“This dovish outlook could provide relief to growth-sensitive sectors, particularly if borrowing costs stabilise and risk sentiment improves,” he said.
Meanwhile, the local bourse traded lower during the previous week, tracking Wall Street and regional market performances.
On a Friday-to-Friday basis, the FBM KLCI fell 27.69 points to 1,618.30 from 1,645.99 in the previous week.
Turnover widened to 14.05 billion units worth RM11.74bil versus 13.10 billion units worth RM12.87bil in the previous week.
The Main Market volume strengthened to 7.69 billion shares valued at RM10.41bil from 6.88 billion shares valued at RM11.67bil the previous week.
