KUALA LUMPUR: The domestic market continued its rebound on Wednesday as investors overcame their surprise over the government's "prosperity tax" and looked ahead to the economic recovery.

       At 9.05am, the FBM KLCI was up 4.31 points to 1,541.94.

       This could be a second day of positive retracement for benchmark index after it plunged over 30 points on Monday as the government's Budget 2022 proposed one-off special tax on high-income companies took investors by surprise.

       "Given the rebound on the FBM KLCI, we expect the near-term floor has been found and investors could have digested the proposed one-off Cukai Makmur and the contract notes stamp duty changes.

       "All in all, the negative earnings impact could be less than expected hence bargain-hunting activities have emerged," said Malacca Securities Research in a note.

       In the previous session, the FBM KLCI recouped 6.71 points to 1,537.63 as banks clawed back some points.

       The rebound on the FBM KLCI has been slight given renewed caution in regional markets as inflation concerns and a wobbly Chinese property market take centrestage.

       A slew of central bank decisions are also due out this week, lending to the jittery mood.

       Bank Negara's own interest rate announcement is scheduled for later today, although most analysts expect the central bank to maintain status quo.

       Among the blue-chips, banks continue to retrace recent losses. Maybank added four sen to RM8.03, Public Bank gained one sen to RM4.05, CIMB was flat at RM5.09 and Hong Leong Bank lost two sen to RM17.90.

       Nestle was down RM1.20 to RM133.80 following its earnings result yesterday, and as investors price in potential cost price increases in the coming months.

       In telcos, Axiata was down two sen to RM3.83 and Maxis lost four sen to RM4.63. Digi was up three sen to RM4.28.

       Plantation stocks were down led by Sime Darby Plantation dropping three sen to RM4.22 and IOI shaving three sen to RM3.90.

       On the broader market, market breadth was slightly negative with 158 gainers versus 126 decliners.

       Top actives were DNeX down three sen to 79.6 sen, Ta Win falling 0.5 sen to 15 sen and Sapura Energy unchanged at 10 sen.