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KUALA LUMPUR: Bursa Malaysia remained under pressure after sliding to a fresh five-month low in the previous session as investors remained wary of contagion from the collapse of three US lenders.
Malaysia’s benchmark stock index opened 4.87 points lower at 1,416.96 with investors pulling out of bank stocks.
“Further downside volatility can be expected given that despite the US Federal Reserve’s attempt to stop-gap the run on deposits in other small banks by way of a federal guarantee, the share price fall in US banks amid worries over imminent contagion should spillover to dampen near-term trading sentiment,” said TA Research in a market commentary.
“Immediate index support is revised down to 1,400, with last October’s low of 1,372 as crucial support preventing further downside.
“Key overhead resistance will be at the 200-day moving average level at 1,470, with 1,500, then 1,512, and subsequently last August high near 1,528 as stronger resistance levels.”
Meanwhile, investors will also be tuned in to the release of the US consumer price index later today, which would give some indication of how the Federal Reserve will approach the next interest rate decision.
“While investors may start pricing in the possibility of pausing rate hikes following the banking crisis in the US, volatility may remain in place on fears over potential slowdown in the economic activity going forward.
“On the local bourse, defensive sectors with solid fundamentals may be set for a rebound,” said Malacca Securities Research in a note.
The research firm added that banking and technology stocks could rebound on bargain-hunting activities in view of the mild rebound on Wall Street overnight, while hunting for defensive stocks within the consumer, telco and utilities sectors.
Blue chips leading the market lower included Maybank down two sen to RM8.42, Public Bank falling four sen to RM3.97, CIMB shedding 10 sen to RM5.23 and Hong Leong Bank dropping 30 sen to RM19.92.
Nestle dropped 70 sen to RM134.90, F&N slid 26 sen to RM25.90 and MSC fell six sen to RM1.95.
Top actives on the market included Vinvest up 0.5 sen to 23 sen, EA Technique
down 4.5 sen to 24.5 sen and Icon unchanged at 9.5 sen.
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