SHARES on Bursa Malaysia are likely to strengthen this week as they correct their oversold positions and track more upswings in Wall Street and the Asian markets.
Analysts, however, advised investors to stay cautious in their trading approach.
The local stock market suffered a steep fall to 1,660.39 points last Wednesday after news of a possible military strike on Syria broke.
Jitters over the possible United States-led military strike against Syria also pushed crude oil prices to a six-month high and dragged Wall Street sharply lower.
Against this negative backdrop, combined with the depreciation of the ringgit against the US dollar, the local bourse retreated into negative territory, as investors fled to the sidelines.
Meanwhile, analysts expect recovering risk appetites as investors see reduced crude oil price and longer-than-expected military intervention in Syria while positive signs of cooperation among emerging market countries through large currency swap lines will reduce currency pressure.
The FTSE Bursa Malaysia KLCI resistance level is expected to be at 1,743 points, followed by 1,756 points.
The next upper strong barrier is expected to be at 1,770 points.
Encouraging data on the US economy also suggest that the country's growth is accelerating on a stable footing, which bodes well for global trade.
Lower oil prices, relief in emerging market currencies and fading demand for safe haven assets such as Treasury bonds and gold are also expected to lend support to global equities.
Domestically, some headlines that are likely to spur the local stock market include Maybank Bhd signing a three-year collaboration in the Vietnam securities industry, Yinson Holdings Bhd venturing into Africa for bigger oil and gas-related services, and Naim Holdings Bhd growing its properties to more than RM1 billion in five years.