Local stocks are expected to continue facing volatility amid the dovish US Federal Reserve’s stance and the uncertainty on the global banking sector.
Analysts said trading woud remain bumpy over the short term as the recent fall of Credit Suisse and last week’s dovish comments from Fed chair Jerome Powell could further dampen market sentiments.
Fears of a global banking crisis are forcing central banks to rethink their aggressive monetary tightening policy because of the negative impact of the banking sector.
“Despite cues for a pivot sooner than we anticipated, we maintain cautious of inflation-interest rate movements in the medium-term as drivers have yet to go down convincingly,” online brokerage firm 2TradeAsia.com said.
“There is more work to do the reach goldilocks conditions in terms of inflation, and by extension, interest rates, which supports the case of extra vigilance,” it said.