KUALA LUMPUR: Expectations of continued interest in plantation stocks amid rising crude palm oil price and the US Federal Reserve (Fed) rate cut are set to counterbalance potential election-related fluctuations, stabilising Bursa Malaysia's performance next week.

Rakuten Trade Sdn Bhd's equity research vice president Thong Pak Leng said the plantation sector's appeal has drawn additional investor interest and supports market resilience against global economic challenges.

He believed the recent pullback, whereby the FTSE Bursa Malaysia KLCI (FBM KLCI) dipped below the key support level of 1,600, offers an appealing entry point for both short-term and long-term investors.

"With cheaper valuations and oversold signals emerging, there is potential for accumulation and recovery," he said, adding that this may see the benchmark index trending within the 1,600-1,630 range next week.

Meanwhile, UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan anticipated the Federal Open Market Committee (FOMC) may also act decisively to maintain neutrality in the immediate post-election environment.

"While the election outcome will likely shape US market sentiment, we expect minimal direct impact on Malaysian markets, as local investors have largely taken a cautious stance.

"Consequently, a wait-and-see approach may dominate trading, with investors in Malaysia watching Wall Street's reaction closely and considering the implications for US economic policy," he said.

Current market consensus expects a 25-basis-point rate cut, lowering the federal funds rate to 4.50–4.75 per cent, with this decision reflecting easing inflation towards the Fed's 2.0 per cent target and a slight rise in the US unemployment rate, indicating labour market softening.

He noted key sectors sensitive to interest rates, including real estate, finance, and consumer goods, may experience renewed interest.

Lower rates could also ease financial pressure on Malaysian companies with US dollar-denominated debt.

"October was a challenging month for the FBM KLCI, which experienced selling pressure, declining from 1,656 at the start of the month to close October at 1,601, a drop of over 50 points.

"This dip may attract bargain hunters, and we foresee that post-election, investors could begin repositioning portfolios as early as one week after the election," he said.

On the domestic front, investors will closely watch upcoming economic indicators for September, including wholesale and retail trade (Nov 7) and industrial production and manufacturing data (Nov 8), which will provide insights into Malaysia's third-quarter (3Q) economic performance.

"With preliminary 3Q estimate at 5.3 per cent, these figures are critical for assessing economic momentum," he added.

On a Friday-to-Friday basis, the FBM KLCI fell 14.32 points to 1,603.98 from 1,618.30 in the previous week.

The FBM Emas Index lost 92.28 points to 12,128.34, the FBM 70 Index sank 35.74 points to 17,678.93, the FBMT 100 Index dived 82.15 points to 11,839.79, the FBM Emas Shariah Index slipped 97.54  points to 12,102.44, and the FBM ACE Index fell 104.66 points to 4,996.35.

By sector, the Financial Services Index declined 257.27 points to 19,004.76, the Energy Index was 7.73 points lower at 838.8, and the Industrial Products and Services Index edged down 2.15 points to 173.57, but the Plantation Index surged 156.79 points to 7,456.37.

Turnover declined to 9.60 billion units worth RM9.88 billion versus 14.05 billion units worth RM11.74 billion in the previous week.

The Main Market volume dwindled to 5.30 billion shares valued at RM8.88 billion from 7.69 billion shares valued at RM10.41 billion last week.

Warrants turnover decreased to 2.55 billion units worth RM396.20 million against 4.36 billion units worth RM649.09 million before.

The ACE Market volume slid to 1.71 billion shares valued at RM598.99 million compared with 1.98 billion shares valued at RM679.27 million previously.