FBM KLCI

• The FBM KLCI edged up 0.22% (+3.58 points) to 1,633.55 last week amid cautious trading ahead of the Budget 2025 announcement and mixed regional market performance. Notably, all sub-sector indices saw weekly increase, except for the Energy and Financial sector, which dropped 1.2% and 0.1%, respectively. The Construction, Healthcare, and Property sectors led the gain, increasing 3.4%, 2.7%, 2.5% WoW, respectively. Weekly turnover decreased to 14.17b units valued at RM12.87b, down from 16.87b units valued at RM13.54b the previous week. Foreign outflows appeared to be tapering off since last Tuesday, following 11 consecutive days of net outflows, though daily inflows remained below RM100m.
• Looking ahead, all eyes will be on Malaysia's Budget 2025 announcement on October 18, which could influence foreign investment and local equities. Key economic data from China, including 3Q GDP and September's CPI, will be critical for assessing regional economic conditions. In the U.S., the start of the 3Q earnings season and retail sales data will also be pivotal. We expect cautious trading with potential volatility as markets react to these significant events.
• Technically, the weekly FBM KLCI chart has formed a 'doji' candlestick pattern following a week of sideways trading, indicating market indecision. The weekly stochastic and RSI indicators have moderated from overbought levels after recent consolidation.
• We expect the market to remain in a consolidation phase with an upside bias, especially if foreign net inflows continue. A stronger uptrend could occur if the index decisively breaks above the immediate resistance at 1,642 (aligned with the 5-week SMA), potentially pushing it towards the next resistance at 1,675. On the downside, a break below immediate support at 1,633 could lead the index to test the crucial 1,615 level (coinciding with the 13-week SMA). A break below this level would signal the end of the short-to-medium upward trend.

Source: Kenanga Research -