The FBM KLCI staged a rebound from last week’s selldown as investors snapped up selected banking heavyweights. Nevertheless, we believe the widespread rout on Wall Street overnight over the aggressive rate hikes concerns will spill over to the regional markets and the local bourse. Meanwhile, foreign funds remained in a selling undertone (5-day net foreign selling: RM261.4m).

The FBM KLCI tumbled along with the regional peers as global sentiment was dampened by fears over global recession under the interest rate upcycle environment. Also, we believe the local bourse will remain volatile at least until the US Fed’s September meeting amidst heightened expectations for hawkish monetary policy decisions.

The FBM KLCI slipped into the negative territory at the closing bell on Friday as sentiment remained fragile prior to the Malaysia Day holiday weekend. All eyes should be on the US Fed’s September meeting and Malaysia’s inflation rate this week. Hence, the local bourse may continue to see sideways trading tone along with the regional peers as investors preparing for further interest rate hikes by the US Fed.

The FBM KLCI witnessed another wipe-out along with the regional peers on the back of inflation induced rout. We believe market should remain volatile at least until the FOMC meeting which will be held next week as investors will be waiting for more clarity from the Fed’s Chairman Jerome Powell going forward on the interest rate decision; currently the market is pricing in a 75-basis point rate hike. Meanwhile, geo-political uncertainties could be capping the upside reward at this juncture.

The FBM KLCI remained beneath the key 1,500 level as profit taking activities emerged in selected banking and industrial products & services heavyweights. We believe the market sentiment may turn negative again following a sharp selldown on Wall Street triggered by a stubbornly high inflation, which will prompt the US Fed to maintain its hawkish stance at least for the near term.

Buying momentum in selected plantation, banking, and healthcare heavyweights pushed the FBM KLCI to close for the fourth straight session. We believe sentiment is turning positive as the regional markets and Wall Street are on a rebound mode ahead of the CPI data. We think the investors may shrug off inflationary concerns and turn their focus to the upcoming Budget 2023 which will be tabled in October.

The FBM KLCI ended the week on an upbeat note along with the regional markets, mainly lifted by the gains in the banking heavyweights following the OPR hike. We believe the local bourse is on pace for further upside after a broad-based rebound on Wall Street overnight, as investors could be taking a view that the CPI data is likely to decline and the Fed may be looking at a smaller hike going forward. Hence, the focus this week will be on the US and Eurozone’s inflation rate.

The FBM KLCI closed on a positive note, tracking the performance on Wall Street. We believe the key index should find firmer footing moving forward following an extension of rebound on Wall Street as softening crude oil price could ease the inflationary concerns on the global front. Nevertheless, the mounting economic risk in China may pose some threat to the global markets.