Bursa Malaysia is expected to continue to strengthen this week as the FBM KLCI has the potential to surpass the psychological level of 1,700 points, with some analysts even seeing the index reaching up to 1,730 points.
The usually positive sentiment at the beginning of the year is seen to be rekindling the market, with fund managers starting to increase their exposure to selected stocks.
The services and manufacturing sectors are expected to be the main focus, supported by brighter growth prospects and expected foreign fund inflows.
However, the upward path is not without challenges. The 1,720 point level is considered the main resistance in the short term, while 1,680 points will be a support bar if the market pulls back.
Banking stocks such as Maybank, Public Bank and CIMB remain in demand from investors due to expectations of stable OPR and attractive dividends.
At the same time, the construction and utilities sectors continue to receive support from infrastructure projects and data center development.
On the other hand, investors are reminded to be cautious of the export-oriented technology, oil & gas, and gloves sectors, which remain vulnerable to external uncertainties and global demand cycles.
