KUALA LUMPUR: Bursa Malaysia is expected to stage a rebound next week, driven by spillover effects from the robust rallies in both China and the United States (US) markets.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said continuous foreign fund inflows, fueled by expectations of further rate cuts, combined with a strengthening ringgit, could bolster support for the FTSE Bursa Malaysia KLCI (FBM KLCI).
"However, it is critical to recognise that market sentiment remains susceptible to external shocks and domestic developments.
"Therefore, we anticipate the benchmark index to trade within the 1,660 to 1,680 range next week, highlighting the precarious nature of the current market environment," he told Bernama.
Mohd Sedek noted that the renewed optimism on China's latest stimulus measures suggests a potential rebound in its economic activity, which is likely to drive demand for commodities, particularly in sectors such as oil and gas, plantation, and building materials.
Moreover, China is set to release both the official and Caixin purchasing managers index (PMI) data on Monday.
He is projecting a slight recovery in the official manufacturing PMI to 49.3 from 49.1, which could provide further insights into the trajectory of China's economic recovery.
"In addition to these developments, we expect strong buying momentum on Wall Street, driven by renewed confidence in the semiconductor and technology sectors to spill over into local equities.
"This is particularly relevant for the Bursa Malaysia technology index, which experienced losses in the previous trading week. Small-cap stocks, in particular, stand to gain from this improving sentiment," Mohd Sedek explained.
The local bourse traded mostly lower during the week on profit-taking amid positive regional sentiment after China unveiled fresh stimulus measures.
On a Friday-to-Friday basis, the FBM KLCI fell 8.73 points to 1,660.09, compared to 1,668.82 the previous week.
Across Bursa Malaysia's index board, the FBM Emas Index sank 152.15 points to 12,386.60, the FBM Emas Shariah Index dipped 99.43 points to 12,313.04, the FBMT 100 Index lost 143.04 points to 12,088.17, the FBM 70 Index erased 503.42 points to 17,438.48 and the FBM ACE Index shed 44.78 points to 5,158.05.
In terms of sectors, the Industrial Products and Services Index eased 1.50 points to 177.34, the Energy Index was 19.97 points lower at 856.75 and the Financial Services Index slid 222.48 points to 19,466.3.
The Plantation Index, however, climbed 16.58 points to 7,193.23.
Turnover widened to 16.61 billion units worth RM15.08 billion, compared to 13.67 billion units worth RM16.15 billion in the previous week.
The Main Market's volume increased to 8.64 billion shares worth RM13.76 billion from 8.37 billion shares worth RM15.22 billion last week.
Warrant turnover strengthened to 5.87 billion units worth RM747.19 million from 3.69 billion units worth RM403.07 million the week before.
The ACE Market's volume improved to 2.08 billion shares worth RM567.43 million, compared to 1.60 billion shares worth RM519.71 million previously.