KUALA LUMPUR: Bursa Malaysia reversed its early losses on Friday amid a mostly lower regional market performance, after a technically-driven sell-off in US markets triggered a bout of early morning risk aversion.
The benchmark index FBM KLCI dropped to an intraday low of 1,460.59 points at 9.28am before settling the day 0.43 per cent higher or 6.33 points to 1,474.68.
At 9.15 am, the index fell by 0.33 per cent or 4.86 points to 1,463.49 from Thursday's closing of 1,468.35, in line with Wall Street which tumbled overnight on concerns over more rate hikes.
SPI Asset Management managing director Stephen Innes said sentiment in Asia remainef supported by Chinese policymaker's pledge to support the broader economy during the reopening processes.
"Hence I suspect local investors will remain opportunistic buyers on any sell-off.
"If the US Personal Consumption Expenditures Price Index (PCE) inflation data release tonight continues to point toward easing inflation in the US market, there is a better chance for the FBM KLCI to trade above 1,500 next week," he told the New Straits Times on Friday.
Rakuten Trade Sdn Bhd said Wall Street tumbled as concerns over more rate hikes returned following a strong economic showing in the US.
"Although all three major indices closed off their day's low, the DJI Average lost almost 350 points while the Nasdaq declined by 233 points as the US 10-year yield inched marginally higher at 3.69 per cent.
"Back home, the FBM KLCI finally closed positively as bargain hunting emerged despite the market undertone remaining jittery," it said.
Rakuten said persistent selling by foreign funds had been rather surprising so far this month with a net outflow of around RM1.34 billion albeit an improving political climate domestically.
"Nonetheless, we reckon sentiment to remain cautious as news that China may see a spike in Covid cases."
Yesterday's Bloomberg was on record stating that inbound travellers would only need to face three days of quarantine, which suggested China was on a fast track to reopening the country.
Hence, Innes expects the ringgit to trade very transactional in nature next week, given markets are entering a week-long holiday period.
"But traders will still keep a keen eye on China and oil prices. As investors gain more confidence in the government, I expect the ringgit to trade on a favourable note into the new year.
"I suggested 4.41.4.43 for next week. But it will depend on the US PCE inflation data release tonight, continuing to point toward easing inflation in the US market. If it comes in soft or on consensus, ringgit will strengthen next week," he said.
