KUALA LUMPUR: Bursa Malaysia is likely to see cautious trading next week with the benchmark index moving within a tight band of between 1,450 and 1,470 amid weak external factors, said an analyst.   

SPI Asset Management managing director Stephen Innes said the uptick in geopolitical risk following reports that China is preparing to increase its support for Russia would weigh on regional risk sentiment as investors move into safe-haven trades.

"So, now the local stock market is not only competing with a hawkish US Federal Reserve driving up US yields but an uptick in geopolitical risk," he told Bernama.

Innes noted that a lot of focus were on the US Personal Consumption Expenditure inflation reading released late Friday.

"If it comes in above expectations, we could see a further sell-off in local stocks early next week due to an expected higher US yields. On a positive note, the downswing in sentiment could find support from the China Purchasing Managers' Index data set to be released on Feb 28.

"Given the surge in mobility in China, the data should come in strong and offer a bit of a lifeline to local sentiment. So, there is a lot to digest next week," he added.

Given the uncertainty on several fronts, Innes said investors would be reluctant to add risk and expected the FTSE Bursa Malaysia KLCI (FBM KLCI) test the 1,450-level again.

For the week just ended, Bursa Malaysia saw cautious trading as investors were on the sidelines to await the revised Budget 2023 announcement on Friday.

"Malaysia unveiled a scaled-back spending budget and it was received negatively by local stocks today, but I think China is a bigger story next week," said Innes.

On Friday, the Department of Statistics Malaysia released the Consumer Price Index number.  Malaysia's overall price growth moderated to a seven-month low with headline inflation rate descended to 3.7 per cent year-on-year, the lowest since July 2022 and in line with market estimates.

On a Friday-to-Friday basis, the FBM KLCI declined 20.10 points to end at 1,456.80.

On the index board, the FBM Emas Index fell 115.72 points to 10,626.44, the FBMT 100 Index slid 112.42 points to 10,297.82, and the FBM Emas Shariah Index went down 171.89 point to 10,930.59.

The FBM 70 Index dipped 20.22 points to 13,505.21 and the FBM ACE Index was 99.61 points lower at 5,560.02.

Sector-wise, the Plantation Index fell 45.35 points to 6,792.33, the Energy Index climbed 7.0 points to 890.84, the Financial Services Index slid 14.39 points to 1,6021.83, while the Industrial Products and Services Index gave up 10.86 points to 179.66.

Weekly turnover declined to 16.79 billion units worth RM10.89 billion against 18.22 billion units worth RM10.88 billion on Friday last week.

The Main Market volume slipped to 10.35 billion shares valued at RM9.02 billion from 11.54 billion shares valued at RM8.79 billion a week ago.

Warrants turnover fell slightly to 1.90 billion units worth RM297.03 million from 1.93 billion units worth RM265.51 million previously.

The ACE Market volume decreased to 4.16 billion shares worth RM1.56 billion from 4.74 billion shares worth RM1.82 billion last week.

 - BERNAMA