KUALA LUMPUR (Oct 22): The FBM KLCI is set to take a breather and pause to consolidate on Friday.

Hong Leong Investment Bank (HLIB) Research said following the breakdown below 1600-1605 supports on Thursday, the FBM KLCI could consolidate further (with major supports at 1560-1574) ahead of the Budget 2022 (Oct 29) after rallying from a low of 1515 (Oct 5), due to the steeply overbought stochastic and signs of weakening in RSI and MACD indicators.

In its traders’ brief on Friday, the research nevertheless said it expects the FBM KLCI to resume an uptrend after a brief profit taking pullback, underpinned by further economic reopening with more states are migrating to phase 3 & 4 of National Recovery Plan, promising vaccination progress (95% of the adults had fully vaccinated on 20 Oct), as well as riding on firm commodity prices.

Meanwhile, JF Apex Research said the US market was mixed overnight with the S&P risin to a record high while the Dow declined amid quarterly results.

In its daily highlights on Friday, it said European stocks closed slightly lower following corporate earnings and concern over China Evergrande.

"On the local market, the FBM KLCI plunged 14.70 points to 1591.62 points.

“Following Thursday's selldown, the FBM KLCI could take a breather from the recent rally and consolidate below the resistance of 1610 points,” it said.