Keeping gains in check

Last Friday, the FBM KLCI bucked the losses on Wall Street and surged above the 1,600 psychological level; the continued buying interest in banking heavyweights after BNM’s decision to remain the OPR, coupled with the gains in energy stocks spurred the key index rally. We reckon the positive momentum of the key index to continue as the rallies in the banking sector may indicate market’s hope for economic recovery. Meanwhile, the Brent oil price continued seeing its uptrend after OPEC and its allies decided to keep production steady through April.

The FBM KLCI settled in red in tandem with the regional peers as selling pressure in the glove stocks returned, offsetting the gains on the banking heavyweights following the unchanged Overnight Policy Rate (OPR) by Bank Negara Malaysia. Tracking the losses on Wall Street overnight, we expect the local bourse may continue to consolidate further as market players are likely to trade on a cautious tone on the broader market. Nevertheless, we expect traders to position themselves for the recovery theme as Covid-19 vaccination is taking place. Meanwhile, the Brent oil price has surged firmly above USD65.