BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Profit taking emerged on Tuesday to leave the FBM KLCI below the 1,580 level at the close.
Earlier in the session, however, the key index tested the 1,590 level but profit taking in the afternoon session sent it lower.
In the broader market, trades were mixed, mirroring the performance of regional equities but transportation and logistics stocks were the day’s main movers with losing stocks and gaining ones nearly equal. Total trades were little changed at around 4.2 billion shares for the day.
After the strong recent push, the FBM KLCI is ripe for a consolidation with pullback seen continuing over the near term.
Market conditions are likely to follow the performance of regional indices that are also pulling back due to the US Federal Reserve’s decision to keep interest rates higher-for-longer in view of the stubbornly high inflationary conditions as well as its neutral-to-hawkish stance for now.
The consolidation will allow the key index to take a breather and for the gains to be digested albeit further selling may be mild due to the sustained buying support that could cushion much of the profit taking pressure.
Therefore, supports are seen at the 1,565 level, followed by the 1,560 level. On the upside, the immediate hurdle is at 1,580 points with the ensuing resistance set at 1,583 points.
Malacca Securities Research
After hitting another fresh 52-week high, profit taking activities emerged among YTL-related heavyweights, hence contributing to the negative close in the FBM KLCI.
Meanwhile, Wall Street traded mixed and retreated from their intraday highs, respectively on the three major indices despite the US Fed keeping the interest rate unchanged as it notes “lack of further progress” on inflation.
Still, we believe the US Fed will be data dependent and may only reduce the rates until the inflation is moving nearer to its inflation target of 2%.
On the commodity markets, Brent crude retraced significantly to trade below US$84/barrel as EIA reported US oil inventories rose by 7.3 million barrels last week while CPO (crude palm oil) continues to consolidate around RM3,800-RM3,900/metric tonne.
The FBM KLCI index retraced from its 52-week high. The technical readings on the key index, however, were positive with the MACD Histogram extending another positive bar while the RSI maintains above 50.
The resistance is envisaged around 1,590-1,595 while the support is set at 1,555-1,560. – May 2, 2024
