KUALA LUMPUR, July 11 ― Bursa Malaysia is likely to trade with an upside bias next week extending this week’s gains, on a strong follow-through buying momentum, said an analyst.

Maybank Investment Bank senior chartist Nik Ihsan Raja Abdullah said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) closed the week on a firmer note and recouped all the losses since the start of the year, recording 1.73 per cent year-to-date (y-t-d) gains.

The benchmark index closed at 1,591.84 anchored by strong buying interest in banking and rubber glove stocks this week, making it among the best performing indices in the region, he told Bernama. 

He noted that the healthcare index continued to outperform the rest of the sector by a mile after gaining 4.25 per cent yesterday and 144.92 per cent y-t-d.

Technically, he said, the FBM KLCI Index was traded above the 100-week exponential moving average (EMA) line for the first time since October 2018.

"Despite trading in overbought territory, the FBM KLCI Index still has some room to go with the next resistance pegged between 1,615 and 1,635.

"Immediate support however can be observed at 1,560 and 1,540,” Nik Ihsan said.

Bank Negara Malaysia on Tuesday announced a reduction in the Overnight Policy Rate (OPR) by another 25 basis points to 1.75 per cent, a record low since the floor was set in 2004.

Moving forward, he said lower expectation for a further OPR cut is expected to continue to provide support and spark buying interest in banking stocks.

On the other hand, the higher number of recovered Covid-19 patients recorded in Malaysia would also bring about positive sentiment, as it would result in greater economic activity as the majority of businesses reopen.

He added that investors should be on the lookout for some jitters in the US market which could spark profit taking.

For the past week, the key index FTSE Bursa Malaysia KLCI (FBM KLCI) was supported by a by financial stocks as the OPR cut had mostly been priced in, as well as strong buying in glove makers’ stocks.

On a Friday-to-Friday basis, the index rose 39.19 points to end at 1,591.84.

On the scoreboard, the FBM Emas Index increased 298.78 points to 11,206.81, the FBMT 100 Index gained 300.81 points to 11,061.38, while the FBM Emas Shariah Index added 329.57 points to 12,811.95.

The FBM 70 expanded 489.15 points to 13,816.85 and the FBM ACE Index climbed 434.84 points to 7,175.65.

Sector-wise, the Plantation Index increased 47.73 points to 6,861.08, the Financial Services Index advanced 468.59 points to 13,546.64 but the Industrial Products and Services Index eased 1.10 points to 139.07

Weekly turnover increased to 47.26 billion units worth RM24.58 billion from 31.31 billion units worth RM18.23 billion in the previous week.

Main Market volume rose to 27.37 billion shares worth RM20.36 billion from 14.83 billion shares worth RM14.39 billion previously.

Warrants turnover widened to 3.34 billion units worth RM1.26 billion from 2.49 billion units worth RM714.48 million the week before.

The ACE Market volume went up to 16.54 billion shares worth RM2.96 billion from 13.98 billion shares worth RM3.12 billion previously. ― Bernama