The FBM KLCI bounced higher along with the regional markets amid a relief rally in view of a rescue plan for the US banking sector. Although the volatility may persist on the local bourse following Wall Street’s retreat amid lingering concern over the US banking turmoil and Credit Suisse crises, we expect the market to stay calmer as UBS announced to take over Credit Suisse just this morning. Meanwhile, traders will monitor on the US Federal Reserve interest rate decision this week.

Resurfaced fears over global banking crisis has once again sent the FBM KLCI below the key 1,400 mark, but we expect a broad-based rebound on the local bourse amid increased optimism on Wall Street over banking industry following a joint rescue on First Republic by several big US banks. Nevertheless, the rebound could be short-lived as investors are likely to trade in a cautious mode while keeping an eye on the US Fed’s interest rate decision next week.

The FBM KLCI bounced higher to close above the key 1,400 level as investors picked up beaten down stocks on the broader market. However, global uncertainties may not abate with the Wall Street turning mixed once again on the back of revived fears of a banking crisis; Credit Suisse is making the headlines after Saudi National Bank mentioned it will not provide further financial help for the bank. Thus, the local bourse may trade in consolidation mode prior to the US interest rate decision next week. Commodities wise, the Brent crude oil fell steeply below the USD75 zone, while the CPO price declined below the RM3,900 level.

Lingering fears over the collapse of the US banks rippled through markets, dragging the FBM KLCI below the key 1,400 level. Following a five-session rout, the local bourse is likely to see some rebound along with the regional markets as the largely-in line inflation data in the US could ease investors’ concern on aggressive interest rate hikes next week. Economic indicators wise, the European Central Bank’s interest rate decision and Eurozone’s inflation rate will be the next focus.

The FBM KLCI declined for the fourth straight session as the turmoil in the US banks weighed on broader market sentiment. We expect investors will be focusing on the consumer price index that will be released later today. While investors may start pricing in the possibility of pausing rate hikes following the banking crisis in the US, volatility may remain in place on fears over potential slowdown in the economic activity going forward. On the local bourse, defensive sectors with solid fundamentals may be set for a rebound.

The FBM KLCI succumbed to broad-based selling pressure amidst intensified selldown across regional markets due to persisted worries over interest rate hikes and concerns over the Silvergate and SVB events last week. We believe the risk will remain tilted to the downside given the potential contagion effect within the banking sector in the near term as New York Signature Bank is being shut down, but there is a glimpse of hope on the potential bailout situation at this juncture; the US futures are rising. Meanwhile, the US inflation rate will be in focus this week.

The FBM KLCI declined further into the negative territory as the Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate were within expectation, while the focus was shifted towards the concerns of bigger rate hikes in the US and weakness in the regional markets; 5-day foreign net selling stood at RM427.3m. Global sentiment shall remain on edge while awaiting key payroll reports from the US later today. Given the negative sentiment abroad, we believe the local stock market may trade cautiously amid intensifying global risk.

The FBM KLCI surrendered yesterday’s gains in line with the regional markets’ movements as investors digested the hawkish comments from the US Fed Chair during the congressional testimony. On Wall Street, we believe it might consolidate over the near term ahead of the CPI data that will be released next week, as this might dictate the interest rate direction going forward. The local bourse may remain sideways amid growing selling pressure from the foreign funds, while awaiting the OPR decision by BNM today.