KUALA LUMPUR: The domestic market looks set to continue its sideways trajectory with a downside bias after it charted a weekly loss last Friday on fears over the global economic environment.
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At the opening bell, the benchmark FBM KLCI was up 0.61 points to 1,423.53, a slight change that reflects a continuation of the range-bound movement seen over recent days.
According to TA Securities Research’s market commentary, given the weak technical momentum and absence of stronger follow-through buying to sustain recent gains on the local market, near-term upside potential will be fragile and prone to profit-taking and selling pressure from market players looking to exit or lighten trading positions.
Externally, the research house said recent economic readings on weaker US consumer sentiment, high inflation expectations and ongoing worries over the looming debt ceiling should act to dampen sentiment in the immediate term.
There will be also be added interest from the upcoming mid-year review of the FBM KLCI constituents, which will be updated using the closing share prices on next Monday.
Kenanga Research noted in its weekly review that there is a possibility that Inari (which is currently in 37th position) may be replaced by either Westports (in 29th position) or Malaysia Airports (in 30th position), based on last Friday’s market cap ranking.
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The research house also said investors should keep their eyes on the latest developments pertaining to the US national debt limit standoff.
“Briefly, an unresolved (or prolonged) outcome arising from the political showdown – as the US federal government may run out of cash and trigger a default as early as beginning June – could result in far reaching ramifications across the financial world, damaging confidence and causing a global economic catastrophe,” it said.
On Bursa Malaysia, early share movements included players in the consumer sector such as Heineken rising 30 sen to RM28.50, Carlsberg adding 10 sen to RM21.72 and Nestle gaining 30 sen to RM134.80.
Most active stocks were Classita rising one sen to 17 sen, SMRT down 1.5 sne to 63.5 sen an Jade Marvel up 1.5 sen to 28.5 sen. – The Star