The FBM KLCI extended the rebound for the second session as buying support
emerged within selected index heavyweights within the Banking and Utilities sector
following the small-cap and lower liners selldown started 2 weeks ago. Meanwhile,
the US stock markets headed for another round of rally as US 10-year Treasury yield
dipped ahead of several important key economic data such as the (i) US GDP, (ii)
core PCE Index and (iii) US PMI; the Dow closed above 38k for the first time. Given
the positive rally on Wall Street, we believe the buying interest may persist on the
local front. On the commodity markets, the Brent oil spiked near the USD80/bbl mark
after a drone attack on a Russian port in the Baltic Sea.
Sectors focus: Following the Wall Street rally, we expect buying support to prevail
on the local front, especially the Technology sector. Meanwhile, we noticed strong
trading activities within the h the strong sustaining rally in the US, we expect buying
interest to build up on the local exchange within the Construction, Property and
Utilities sectors, which is within our expectation as it is in tandem with the ongoing
catalysts of (i) the potential revival of KL-SG HSR, (ii) easing requirements of MM2H
as well as (iii) the focus in the Johor-region investments. We believe the Telco sector
will benefit from the rising demand on data centre as well.
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