Japan, US elections to test Bursa Malaysia next week as market sentiments cool

KUALA LUMPUR, Oct 26 — Bursa Malaysia is expected to trade within a narrow range on cautious mode amid geopolitical uncertainties, said an analyst.

UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said geopolitical uncertainties, particularly Japan’s upcoming general election and the United States (US) presidential election would weigh on market sentiments.

“The outcome of Japan’s election may alleviate some regional uncertainty as it could have significant implications for the Bank of Japan’s (BoJ) monetary policy. The BoJ’s recent rate hike to 0.25 per cent has already increased borrowing costs, diminishing the appeal of yen-denominated carry trades and contributing to a broader decline in global stock markets.

“Given current regional and global uncertainties, we anticipate the FTSE Bursa Malaysia KLCI (FBM KLCI) to trade within the 1640-1645 range in the coming week,” he told Bernama.

However, Mohd Sedek remains optimistic that sectors such as technology, construction and consumer products will continue to experience growth.

Meanwhile, the selling pressure in utilities this week is likely to attract bargain hunters, presenting potential investment opportunities, he said.

Additionally, a shift in central banks’ policy tones globally could benefit Malaysia’s technology and small-cap sectors.

“A quarter-point rate cut by the US Federal Reserve is anticipated next month, although expectations for an additional reduction in December have moderated.

“This dovish outlook could provide relief to growth-sensitive sectors, particularly if borrowing costs stabilise and risk sentiment improves,” he said.

Meanwhile, the local bourse traded lower during the week just ended, tracking Wall Street and regional market performances.

On a Friday-to-Friday basis, the FBM KLCI fell 27.69 points to 1,618.30 from 1,645.99 in the previous week.

Across Bursa Malaysia’s index board, the FBM Emas Index lost 146.91 points to 12,220.62, the FBM 70 Index inched down 0.96 points to 17,714.67, the FBMT 100 Index dived 145.63 points to 11,921.94, the FBM Emas Shariah Index slipped 76.97 points to 12,199.98 and the FBM ACE Index shed 19.79 points to 5,101.01.

By sector, the Financial Services Index declined 206.53 points to 19,262.03, the Energy Index was 8.0 points lower at 846.53, and the Industrial Products and Services Index edged down 0.70 of-a-point to 175.72, but the Plantation Index rose 26.05 points to 7,299.58.

Turnover widened to 14.05 billion units worth RM11.74 billion versus 13.10 billion units worth RM12.87 billion in the previous week.

The Main Market volume strengthened to 7.69 billion shares valued at RM10.41 billion from 6.88 billion shares valued at RM11.67 billion last week.

Warrants turnover expanded to 4.36 billion units worth RM649.09 million against 4.08 billion units worth RM660.53 million before.

The ACE Market volume was lower to 1.98 billion shares valued at RM679.27 million compared with 2.12 billion shares valued at RM617.58 million previously. — Bernama