The FBM KLCI rallied higher in tandem with most of the regional markets as telecommunications, plantation, and healthcare heavyweights in focus. As the Wall Street hit the resistance and took a breather after the significant rebound over the past two weeks after investors digested weaker earnings from big technology giants, we expect the negative sentiment may spill over to the regional and local bourses.

The FBM KLCI took a breather from earlier winning streak as profit-taking activities emerged in Petronas-related and selected banking heavyweights. However, we believe the buying interest could spillover from Wall Street to stocks on the local front, coupled with the foreign investors turning net buyers (5-day net buy valued at RM37.1m). Meanwhile, traders might be attuning towards GE15 theme or re-tabling of Budget 2023 after the GE15.

The FBM KLCI advanced on Friday, outperforming the mixed regional stock markets prior to the long weekend break as the official GE15 date was announced. However, investors should remain cautious as persisted worries over possible recession in major economies, which may cap the upside potential over the near term. Meanwhile, traders may focus on the European Central Bank’s interest rate decision which will be released by end of the week.

The FBM KLCI closed at intraday high spurred by persisted buying momentum in PCHEM and selected banking heavyweight after the announcement on the GE15 polling date. Nevertheless, we opine that the local bourse may trade sideways amid prevailing global and local headwinds, such as the political turmoil in the UK following the Prime Minister’s resignation and the still-hawkish Federal Reserve tone on the US interest rate direction. Meanwhile, investors are waiting for the outcome of the GE15.

Banking-led rallies kept the FBM KLCI above the key 1,400 level after the greaterthan-expected special dividend by AFFIN. However, we opine that the rebound may remain fragile as investors may weigh potential global recession concerns over the recent reporting season on Wall Street as the spike in UK inflation spooked the markets. Nevertheless, traders may look at companies with strong balance sheet to invest in the long run.

The FBM KLCI saw a comeback buoyed by buying momentum from foreign funds following a positive cue from Wall Street. Investors may shrug off some recession fear in the near term to position themselves in the ongoing third quarter reporting season on Wall Street. Meanwhile, we expect sentiment on the local bourse to stablise once the GE15 official date is announced later this week.

The FBM KLCI is attempting to find stability over the near term, ahead of the official GE15 date being announced. Meanwhile, China unexpectedly delayed the release of 3Q22 GDP that is scheduled today, may imply that the data might not meet market expectations of +3.4% YoY. Back home, we reckon that the rebound on Wall Street may see buying interest spilling over on beaten down or oversold stocks over the near term. Still, the weakening trading liquidity and the persistent selling from foreign funds (net sell RM870.1m month-to-date) will keep bigger strides of gains at bay.

The FBM KLCI staged a rebound on Friday following the positive cues from global markets. However, we opine that the rebound attempt may stall as Wall Street was hit by another wild swing on the back of rising inflation expectations suggested in University of Michigan consumer survey and potentially the rising concerns of the tightening monetary policies could push the US economy into a recession. Nevertheless, we still expect bargain hunting to emerge within the solid balance sheet companies and stable consumer stocks.