KUALA LUMPUR (Feb 15): MIDF Amanah Investment Bank Bhd Research today reaffirmed its year-end target for FBM KLCI at 1,900 points, underpinned by continued corporate earnings growth this year.

In a note to investors today, the research house said the FBM KLCI was 'quite energetic' as it chalked up 4% gain during January this year, before the pullback in February.

MIDF added that in the local equity market, defensive sectors like plantation and consumer have outperformed during the period of elevated risk-off sentiment, while small cap counters and cyclical sectors recorded deeper pullback.

"On the other hand, the small caps (namely FBM Small Cap and ACE) and cyclical sectors (namely technology, real estate, construction and industrial) fared relatively worse pursuant to the recent market selloff," it said.

Globally, MIDF said the world's equity market had in January continued the upward momentum from last year.

"The so-called January effect ended abruptly as we enter the month of February. Nonetheless, we view the recent world's equity price correction, which emanated from Wall Street, as a healthy development. We reckon the moderated equity price trend trajectory would put the market on a sustainable forward footing that is more in [consonance] with the underlying fundamentals," it said.

MIDF pointed out that recent economic data coming out of the US drew market attention to a pickup in wage growth, which is a sign of a healthy economy.

"On this score, there are not enough indications at this juncture to force the central bank to raise rates much more this year than the three times it has been signalling," it said.