The FBM KLCI closed lower for the second day prior to the release of US CPI data. With the US posting softer-than-expected CPI print at 7.1% YoY (the Fed’s inflation target is at 2% YoY), the Wall Street has advanced overnight as investors expect either a gradual interest rate hike progress or lower quantum of increase going forward. At this moment, the market believes that the worst of inflation is behind us and the global stock markets may see some recovery.

The FBM KLCI dipped alongside with the regional markets as traders were cautious ahead of the monetary policy meetings across the globe this week. Given that the Wall Street gained momentum overnight in the anticipation of a declining US CPI data, we expect buying interest may set in for the local exchange. Nevertheless, the FOMC meeting outcome on the 14th of Dec will be crucial for the overall stock markets’ direction. At this stage, the market is expecting a softer CPI and the Fed may turn dovish.

The FBM KLCI rebounded after a 5-day selldown and amid broad-based buying interest emerged in tandem with the positive sentiment across regional markets. However, given the pullback last week on Wall Street, the local bourse may trade in a range bound mode this week ahead of a series of interest rate decisions from the US Fed, UK Bank of England, and European Central Bank. Nevertheless, investors will be looking forward to China’s further reopening and easing of Covid-19 restriction.

The FBM KLCI was dragged down marginally by the selldown in Petronas-linked heavyweights; 5-day net foreign selling stood at year-to-date high of RM938.8m. The global stock markets are deploying a wait-and-see approach as investors are waiting for more details from the upcoming FOMC meeting, focusing on the US Fed’s interest rate decision next week. Nevertheless, we believe some bargainhunting activities to emerge on the domestic front following the Covid-19 easing measures in China.

The FBM KLCI extended its losing streak as investors continued to stay on the sidelines. While investors may cheer for China’s easing of Covid-19 restrictions, gains might be capped as worries over the US Federal Reserve long rate-hike cycle could dampen the economic growth going forward. On the local front, we believe focus will be on the re tabling of Budget 2023 and traders will be watching the developments on the tackling of high living costs by the government.

The FBM KLCI closed flat as the investors stayed cautious taking cue from the negative Wall Street performance. Moreover, we expect traders to remain on the sidelines ahead of the US CPI data next week, coupled with the FOMC meeting. Defensive stocks with solid track record in their earnings should be favourable under this challenging environment.

The FBM KLCI declined further as investors deployed a “sell on news” strategy following the formation of new cabinet. With the sentiment turning negative on Wall Street, we expect more profit taking activities to emerge on the local front; especially the technology sector. Nevertheless, we believe the downside risk could be limited with investors eyeing for the 10 new Covid-19 easing measures to be announced by China on Wednesday. Back home, the market will be awaiting announcement from the Ministry of Agriculture and Food Security regarding the new mechanism to control egg prices.

The market sentiment was mixed on the global front as worries over inflation reignited following the release of US labour market report that showed strong data on wages. Meanwhile, the easing of Covid-19 restrictions in China may indicate a shift towards economic reopening. On the local front, the formation of the new Malaysia cabinet may improve investors’ confidence on political stability.