Analysts say share prices of blue chip counters are expected to remain stable, while mid- and small-cap stocks might be affected.
Local stocks are likely headed for a sluggish week as stock buyers are reluctant to take long positions, due partly to the extended break taken by investors in conjunction with the Hari Raya Aidilfitri holiday.
However, analysts said that share prices of blue chip counters were expected to remain stable, while mid- and small-cap stocks might be affected.
"Blue chip stocks may remain firm despite the pre-Hari Raya holiday profit-taking activities. However, mid-cap and lower stocks may be weaker," a broker from a local research house said.
Brokers expect immediate resistance and support levels to be around 1,441 and 1,432, while the next resistance and support could be around 1,452 and 1,420 points respectively.
Trading volume on the local bourse could be significantly lower this week.
The average trading volume of the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI), which has been at about 139.8 million shares, may hover around 100 million this week, similar to previous Hari Raya and Chinese New Year festive periods.
The FBM KLCI rose marginally to 1,437.78 last Thursday, from 1,435.67 early last week, as investors saw signs of improvements in Europe.
The stock market was closed last Friday for the Aidilfitri celebration. Trading volume declined for the sixth consecutive day, due partly to investors' holiday mood.
On September 2, trading volume on FBM KLCI declined by about 20 per cent to 155 million shares. It fell another 7 per cent to 143 million shares on September 3.
Last Monday, volume dropped to 134 million shares. Trading was 104 million on Tuesday, 91.5 million on Wednesday and 70 million on Thursday.
Shares in focus this week include Loh & Loh Corp, SP Setia, Muhibbah Engineering (M) and Bonia Corp.
Last week, Loh & Loh said it had received a letter of acceptance from Tenaga Nasional for the Hulu Terengganu hydroelectric project. SP Setia announced its acquisition of 105ha in Tebrau, Johor, for RM169.3 million. Muhibbah said it had won a contract for the design, fabrication, assembling, commissioning, delivery and testing of eight rail mounted gantry cranes valued at RM56 million. Bonia, meanwhile, said it had agreed to acquire 70 per cent of Jeco (Pte) Ltd, a Singapore-based leather goods retailer, importer and exporter.
Shares of banks and credit card issuers may also be in the spotlight, after a business weekly, quoting sources, reported that Bank Negara Malaysia is looking at implementing measures that will effectively tighten credit card spending.