Key index stocks could still consolidate further, says Inter-Pacific Securities

Key index stocks could still consolidate further, says Inter-Pacific Securities
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KUALA LUMPUR (Sept 3): Inter-Pacific Securities Sdn Bhd said with buying interest waning further, the key FBM KLCI index stocks could still consolidate further, and this may also leave the market’s condition choppier to end the week.

In its daily bulletin today, the research house said key index stocks continued to consolidate yesterday after its bout of overbought recently with more profit taking coming to the fore, particularly on plantation stocks.

It said foreign buying, which has been the mainstay of the recent gains, have also tapered while local institutions were still net sellers.

“As a result, market breadth remains negative with the broader market environment also staying mixed-to-lower due to the lack of fresh catalysts.

“As it is, profit taking also looks to continue due to the lack of new leads as with follow-through buying,” it said.

However, Inter-Pacific said that after two days of pullback, there may be some mild support to keep the key index above the 1,600 points level even as buying interest remains mostly insipid due to little change to the country’s economic and corporate fundamentals that are still affected by the pandemic.

“Below the psychological 1,600 support, the other support is at 1,590 points.

“On the upside, the hurdles are at 1,600 and its most recent high of 1,605 points,” he said.

Inter-Pacific said it still sees the lower liners and broader market shares staying rangebound as the buying interest on these stocks are still anemic amid the lack of leads to encourage more participation.