KUALA LUMPUR (Nov 14): Inter-Pacific Research Sdn Bhd said the near-term outlook for the FBM KLCI remains buoyant as market sentiments have improved with the odds of further steep interest rate hikes diminishing following the easing inflation pressure.

In its daily bulletin on Monday (Nov 14), the research house said Malaysian stocks made a strong up-move last Friday (Nov 11), buoyed by the combination of easing US inflation, stronger-than-expected Malaysian GDP in the third quarter of 2022 (3Q2022) and China’s move to loosen its pandemic restrictions.

It said this helped to push the FBM KLCI to its highest level in two months as market sentiments became more positive.

As a result, it said gainers were ahead of losers by more than a 2-to-1 ratio with the lower liners and broader market shares also making significant headway.

“The near-term outlook remains buoyant as market sentiments have improved with the odds of further steep interest rate hikes diminishing following the easing inflation pressure.

“As a result, there could be renewed buying on Malaysian equities as market players re-position their portfolios due to the lower inflationary and interest rate hike threats,” it said.

Inter-Pacific said bargain hunting could also emerge on some of the beaten down sector leaders as overall market valuations remain attractive and will be supportive of further upsides, although the research house did not rule out some hesitation on quick profit-taking actions at the start of the week.

“Nevertheless, the upside bias should still prevail for the most part and the key index could target the 1,473 and 1,480 levels ahead.

“On the downside, the supports are at 1,460 points and the psychological 1,450 level,” it said.

The research house said the lower liners and broader market shares are also set for further gains amid the improved market sentiments that could also tempt more retail players back into the market.

“There may also be some mild pullback, but with market conditions on the rise again, the near-term gains should be sustained,” it said.