1,700 Level Crucial Turning Point On Bursa Malaysia Next Week

By Zufazlin Baharuddin

KUALA LUMPUR, March 14 (Bernama) -- Bursa Malaysia is likely to trade with a cautious tone as investors closely monitor developments in West Asia and movements in global energy prices.

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the FBM KLCI’s ability to regain and sustain above the psychological 1,700 level will remain an important technical reference point, particularly after the index closed at 1,698.51 at the end of the week.

“If geopolitical tensions remain elevated, volatility could persist as investors reassess the broader macroeconomic implications, including rising inflationary pressures and the potential fiscal impact of higher fuel subsidies,” he told Bernama.

He opined the FBM KLCI could see its immediate support around the 1,675-1,685 range if geopolitical tensions escalate further.

At the same time, investor attention will also turn to the upcoming US Federal Reserve Federal Open Market Committee (FOMC) meeting scheduled for March 17-18.

“Markets are currently pricing in a near 100 per cent probability of a rate hold, but investors will closely watch the updated Summary of Economic Projections and chairman Jerome Powell’s commentary for signals on the future trajectory of US monetary policy,” he added.

For the week just ended, Bursa Malaysia slipped below the key 1,700 psychological level as geopolitical headlines continued to dampen market sentiment after Iran’s new supreme leader Mojtaba Khamenei signalled the Strait of Hormuz would remain closed.

Rising tensions in the Middle East pushed Brent crude back toward US$100 per barrel, marking the second time this week the benchmark has breached that level and reinforcing concerns over potential disruptions to energy flows through the Strait of Hormuz. 

Last Tuesday, US President Donald Trump signalled that the conflict with Iran could end soon. However, the ongoing conflict continues to weigh on the equities market, although the International Energy Agency (IEA) is reportedly proposing to release 400 million barrels of oil.

Adding to the tensions were tanker attacks in Iraqi waters amid the US-Iran conflict.

On a Friday-to-Friday basis, the FBM KLCI shed 12.16 points to 1,698.85 from 1,718.06 a week earlier.

On the index board, the FBM Top 100 Index declined 117.99 points to 12,249.42, the FBM Emas Index shed 121.53 points to 12,405.83, the FBM Mid 70 Index dropped 71.39 points to 17,031.94, the FBM Emas Shariah Index slid 76.88 points to 12,129.92, and the FBM ACE Index trimmed 24.33 points to 4,375.80.

Sector-wise, the Financial Services Index tumbled 369.79 points to 20,418.26, and the Industrial Products and Services Index slipped 3.02 points to 175.27 while the Energy Index rose 1.83 points to 797.10, and the Plantation Index gained 195.75 points to 8,444.19.

Weekly turnover surged to 17.71 billion units worth RM19.38 billion against 17.29 billion units worth RM18.69 billion a week earlier.

Main Market volume rose to 11.15 billion units worth RM18.18 billion against 11.08 billion units worth RM17.45 billion previously.

Warrants turnover increased to 4.87 billion units valued at RM587.45 million from 4.29 billion units valued at RM550.73 million last week.

Meanwhile, ACE Market volume dwindled to 1.67 billion units valued at RM606.73 million from 1.90 billion units valued at RM571.54 million in the prior week.

-- BERNAMA