KUALA LUMPUR: Bursa Malaysia is expected to trade in cautious mode with an upside bias this week, with the benchmark index hovering within 1,525 to 1,530-point range, a dealer said.

       Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the local bourse was expected to draw some buying interest as fundamentally, the economy is poised to recover following the reopening of various sectors.

       “Such narrative holds true and will be earnings accretive,” he told Bernama.

       He noted that the benchmark FBM KLCI saw a significant decline during the past week following the announcement of Cukai Makmur during Budget 2022 presentation.

       “Despite that, the fall in the FBM KLCI was very much in line with the technical indicators, which suggest that the equities barometer had already entered the overbought position prior to the announcement of the budget.

       “In that sense, the market is prime for a correction,” he added.

       For the coming week, he said the focus will be on the United States’ Federal Reserve and the data points coming from the US for market direction.

       “The market is awaiting additional evidence that the Federal Funds Rate would be raised next year. This can be tricky as equities tend to be negative on monetary tightening news,” he said.

       Meanwhile, Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng opined that the local market was expected to remain under selling pressure over the short term due to outflow of foreign funds.

       “We anticipate the FBM KLCI to move around the 1,520 to 1,560 range next week, given the heightened volatility.”