KUALA LUMPUR (Sept 23): Inter-Pacific Securities Sdn Bhd said although there are few signs of a rebound as yet, mild bargain hunting is emerging among index-linked stocks amid their oversold conditions.

In its daily bulletin today, the research house said the FBM KLCI remained on the downtrend yesterday, but the losses were largely contained by mild support on some of the index heavyweights to cushion the weakness among telecommunication giants.

It said conditions elsewhere, however, were more positive with many broader market shares and lower liners regaining traction on renewed buying interest, particularly among technology stocks that saw the technology index reaching a new high and helping market breadth to the positive side.

It said this could lessen some of the downside pressure as the FBM KLCI also looks to find a near-term bottom, adding that the buying could be mild for the time being as market players await the decision on the introduction of the capital gains and windfall taxes.

“Therefore, the mostly cautious market conditions could prolong even as more economic sectors gear towards their full re-opening.

“In the interim, the selling may have ebbed, and the key index could stage a rebound in tandem with the gains in overseas indices.

“The near-term target is at the 1,535 level, followed by 1,540 points. The supports, meanwhile, are at 1,524 and 1,520 points respectively,” it said.

Inter-Pacific said the lower liners and broader market shares have been quick off the blocks lately and their recovery should persist over the near term due to the sustained bouts of fresh buying on some of the beaten-down stocks.

“The slightly improved market sentiments also could provide the impetus for these stocks to gain further ground over the near term,”it said.