The FBM KLCI and FBM Small Cap pulled back for another session as profit taking
activities kicked in prior to the Federal Territory holiday break. Meanwhile, the US
stock markets had a volatile move after the Fed concluded the FOMC, keeping the
interest rates unchanged, affirming that the interest rate is at its peak, but
commented that a March rate cut is unlikely. Hence, the market is pricing in rate cuts
that may happen in 2H24 and will monitor closely on the corporate earnings and
employment report later today. On the commodity markets, Brent oil fell below
USD80/bbl level as the market could be pricing in a ceasefire between Israel and
Sectors focus: Given the overall positive tone from the US stock markets, we believe
the buying support may return within the Technology sector. We think the market
should focus on the upcoming February earnings season, coupled with the trading
themes such as the (i) potential revival of KL-SG HSR, (ii) easing requirements of the
MM2H and (iii) Johor-theme. Meanwhile, the O&G sector may take a breather with
the decline in crude oil prices. Also, the recent LSS5 announcement would bode well
for solar companies.
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