The FBM KLCI extended its rebound marginally higher, ending with a 2-day winning
streak supported by Telco and Construction sectors. Over in the US, Wall Street
maintained its upward tone, closing at 2023 fresh highs after inflation data, the US
CPI came in within expectations at 3.1% YoY (excluding food and energy costs rising
at 4.0% YoY). Since the expectation on the CPI will be on a downward projection, the
market could position for a less hawkish tone by the Fed and will be looking at a rate
as early as May-24. With that, we expect buying support to persist on the US and
local stock exchange. On the commodity markets, the Brent oil prices retraced after
hitting resistance along USD76-77 amid demand concerns in China despite rising
geopolitical tension after Iran-backed Yemeni militants attacked a tanker in the Red
Sea.
Sector focus: With Wall Street headed for new 2023 new highs, and noticed
Broadcom’s all time high position has lifted INARI and the buying interest should
spillover towards the Technology sector. Meanwhile, with the Malaysia cabinet
reshuffling event, there will be positive anticipation within the Telco and
Construction sectors. Meanwhile, traders may avoid again on the O&G stocks with
the volatile move in the Brent oil prices.