BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks lost ground yesterday, giving up the 1,450 level at the close as quick profit taking emerged on reduced odds of the US Federal Reserve pausing its interest rate hike.
The selling also resulted in the key index surrendering the gains it attained a day earlier. The broader market was mixed but market breadth turned negative again.
However, traded volumes continue to pick up to near the 3 billion shares mark.
The near-term market conditions are likely to stay cautious ahead of the Fed and Bank Negara Malaysia’s (BNM) interest rate decisions.
The Fed is widely tipped to lift interest rates another 75 basis points (bps) but market players will be on the look-out for indications if it would slow down the pace of the interest rate increases in 2023.
BNM is also set to follow suit and raise domestic interest rates by another 25 basis points. Under the prevailing environment, the key index could continue drifting for longer as market players could opt to stay on the sidelines until there is further clarity on the interest rate direction.
In the interim, the key index could consolidate further to the 1,435-1,440 levels in tandem with the weak closing on Wall Street overnight.
Further below, there is support at the 1,430 level while the immediate resistance is the 1,450 level, followed the recent high closing of 1,460 points.
Malacca Securities Research
The FBM KLCI fell, bucking the positive performance across the regional bourses as investors’ risk appetite waned ahead of the US Fed’s interest rate decision.
The local bourse may set for further profit taking as investors may brace for potential interest rate hike by the BNM. Meanwhile, the Finance Minister commented that there will be possible adjustments for the Budget 2023 when it is re-tabled.
Commodities-wise, the Brent crude price rebounded nearer to the US$95/barrel level while crude palm oil (CPO) price hit RM4,250/metric tonne as Indonesia raised the reference price.
The FBM KLCI declined to close below its daily EMA60 level, reversing its gains from the previous session. Technical indicators, however remained positive as the MACD Histogram extended a positive bar while the RSI hovered above 50.
Resistance is monitored at 1,465-1,480 while the support is set along 1,400-1,450. – Nov 2, 2022
