KUALA LUMPUR (March 24): Inter-Pacific Securities Sdn Bhd said despite Wednesday’s (March 23) gains, conditions on Bursa Malaysia are still fluid and the near-term outlook will be largely dictated by overseas events for the time being.

In its daily bulletin on Thursday, the research house said this could also mean that key index stocks may retrace over the near term, in line with the weakness in key global indices overnight with the re-emergence of inflationary concerns as crude oil and other commodity prices remain elevated due to the ongoing geopolitical conflict in eastern Europe that shows little signs of abating.

Still, it said the retreat could be mild as the selling pressure is still light and any profit taking should be easily absorbed.

“On the downside, the supports are at 1,594 points and 1,590 points respectively, while the psychological 1,600 level is the immediate hurdle, followed by the 1,607 level.

“After successive sessions of gains, many lower liners and broader market shares are starting to look toppish,” it said.

Inter-Pacific said as such, a pullback is in the offing as profit taking activities may come to the fore with trading activities pausing to allow the trading activities to take a breather.

Meanwhile, Hong Leong Investment Bank said barring any decisive fall below the support trendline near 1,560 levels, the FBM KLCI’s uptrend towards 1,600-1,620 levels remains intact albeit in a choppy move, supported by: 1) persistent foreign net inflows (YTD: +RM5.83 billion; 2021: -RM3.02 billion), 2) high crude oil and CPO prices, 3) Malaysia’s shift into endemic phase and reopening of international borders on 1 April, and 4) positive spillover from the MRT3 announcement.

“Nevertheless, cautious sentiment prevails as the risks of fallout from a prolonged Russia-Ukraine conflict, elevated inflation, FOMC’s latest hawkish tilt outlook, as well as worries over the resurgence of Covid-19 mutations worldwide, would exact a heavy toll on global economies,” it said.