The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract on Bursa Malaysia Derivatives is poised to continue its upward trajectory, mirroring the positive sentiment in the underlying cash market. Analysts attribute this optimism to a confluence of influential global developments, including the recent Republican victory in the United States (US) election, anticipated rate cuts from major central banks, and China's ongoing commitment to supportive monetary policy.

Riding the Wave of Positive Sentiment

Upbeat Outlook for FBM KLCI Futures

The FBM KLCI futures are expected to maintain their upward momentum in the week ahead, building on the positive momentum witnessed in the previous trading sessions. This bullish sentiment is driven by a combination of factors, including the recent Republican victory in the US election, which has raised hopes for policy continuity and stability. Additionally, the anticipated rate cuts from the US Federal Reserve and the Bank of England are seen as catalysts for further market gains, as they are likely to provide a boost to economic growth and investor confidence.China's ongoing commitment to supportive monetary policy is another key factor contributing to the positive outlook for the Malaysian stock market. As the world's second-largest economy, China's economic recovery and policy decisions have a significant impact on global markets, including the FBM KLCI. Investors are closely monitoring China's actions to stimulate its economy and maintain stability, which could have a ripple effect on the Malaysian market.

Anticipated GDP Data Release

The upcoming release of Malaysia's Gross Domestic Product (GDP) data for the third quarter of 2024 is also expected to be a key driver of investor sentiment. The Department of Statistics Malaysia (DOSM) is set to unveil the GDP figures next week, and analysts are anticipating a reading that aligns with the advance estimate of 5.3 percent.A GDP reading above 5.0 percent would be seen as a positive signal, reinforcing investor confidence in Malaysia's economic resilience. This could further bolster the bullish sentiment surrounding the FBM KLCI futures, as investors interpret the strong economic performance as a sign of the country's ability to weather global economic challenges.

Futures Market Performance

In the week just ended, the FBM KLCI futures contract saw significant gains across various expiration months. The November 2024 and March 2025 contracts added 16.5 points each, reaching 1,621.5 and 1,613.0, respectively. The December 2024 contract gained 17.5 points to 1,625.5, while the June 2025 contract rose by 26.0 points to 1,621.0.Despite the positive performance, the trading volume in the futures market dipped to 35,551 lots from the previous week's 46,457 lots. Similarly, the open interest declined to 36,492 contracts from 49,429 contracts in the prior week.On a Friday-to-Friday basis, the FBM KLCI, the underlying cash market index, increased by 17.26 points to 1,621.24, reflecting the overall bullish sentiment in the Malaysian stock market.