The FBM KLCI ended a choppy session higher, mainly buoyed by the telecommunication heavyweights as foreign funds returned for the second consecutive day. While the local bourse may cheer on hopes over China’s reopening, investors may remain cautiously optimistic as the US inflation data which will due later this week may indicate a prolonged interest rate upcycle environment, adding more risk to the shaky stock market.

Tracking the bullish performances across most of the regional markets, the FBM KLCI concluded Friday with a significant rebound as the market was cheered by China’s reopening hopes. With the Wall Street turning positive last week, we expect the local front to trade positively ahead of the GE15 as well as the upcoming financial reporting period. However, we expect investors to stay cautious nearer to the announcement of the US inflation rate as that may dictate the Fed’s view and direction of the markets going forward.

The FBM KLCI plunged after the hawkish remarks from the US Fed; foreign investors turned net seller as outflows from Malaysia accelerated (5-day net foreign selling: -RM114.5m). We believe the local bourse performance may be impacted by the gloomy sentiment over the near term as investors anticipate further interest rate hikes by the US Fed to tackle inflation, contributing to the recession fears. However, investors may position themselves ahead of the GE15 event and the November reporting season.

The FBM KLCI rebounded as investors saw the recent selldown as a buy-the-dip opportunity, positioning for the GE15 event, but the trading activities was relatively quiet as investors remained cautious prior to the US Fed’s FOMC meeting and BNM’s meeting. Nevertheless, we expect the selling pressure may emerge in the Asian stock markets after the US Fed Chairman Jerome Powell reiterated the hawkish stance to combat stubbornly-elevated inflation, which may dampen the attractiveness on interest rate sensitive sector such as technology.

The FBM KLCI fell, bucking the positive performance across the regional bourses as investors’ risk appetite waned ahead of the US Fed’s interest rate decision. The local bourse may set for further profit taking as investors may brace for potential interest rate hike by the BNM. Meanwhile, Finance Minister commented that there will be possible adjustments for the Budget 2023 when it is re-tabled.

The FBM KLCI ended positively in tandem with the regional markets, thanks to the telecommunication sector as well as the plantation heavyweights. However, the profit taking activities on Wall Street after a significant rally may cap the upside potential on the local front. We expect the investors may take a cautious stance ahead of the important FOMC meeting that will conclude on the 2-Nov (US time). Meanwhile, traders may focus on GE15 theme and position within GLC-linked companies.

The FBM KLCI slipped on Friday as profit-taking activities within selected banking and energy heavyweights on the key index pulled the index lower. While Wall Street staged a massive comeback on Friday, investors may continue to monitor a series of event this week including the interest rate decision by the US Feds and Bank of England to gauge economic outlook and market directions going forward.

The FBM KLCI retreated as profit-taking activities emerged amid mixed regional performances led by plantation heavyweights. Given the mixed sentiment on Wall Street following the selldown in tech giants in the US, coupled with the interest rate hike by the European Central Bank, we believe the negative sentiment may spillover to the local front and the FBM KLCI could have limited upside potential for the near term.