BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI endured a volatile session yesterday as it continues to lose pace amid the escalating profit taking from foreign funds that extended its losing streak.
The sell-off was also partly due to the lack of details from China’s economic front that left Malaysian equities on its downward trend.
However, there was support from local institutions that minimised the day’s losses. The broader market was also lower on continuing selling with market breadth also decidedly negative.
We see market conditions remaining unsettled by the lack of impetuses with the above concerns to continue dictating the market’s near-term performance.
At the same time, the FBM KLCI’s uptrend since the start of the year looks to have run its course and may see the consolidation trend continuing for now.
The lingering concerns over China’s insipid economic growth prospects in 2024 and the US interest rates staying elevated for longer could also weigh on sentiments on Bursa Malaysia.
As a result, the on-going consolidation is likely to persist with foreign funds becoming net sellers as they continue to lock in their profits.
This could leave the key index to drift with the supports remaining at the 1,530-1,532 levels, followed by the 1,522 level. The immediate hurdle is at 1,540 points, followed by the 1,545 level.
Malacca Securities Research
The FBM KLCI reversed significantly from an intra-day low following a retreat from Genting-related and banking heavyweights.
On Wall Street, major indices were dragged lower by most of the Magnificent 7 companies except for Nvidia as the AI (artificial the intelligence) theme is still in focus.
Besides jobs data, traders will be monitoring closely US Federal Reserve chairman Jerome Powell’s speech later tonight.
Closer to home, there might be a shift in sentiment following the weaker tone in the US stock markets with a limited upside in sight.
On the commodity markets, Brent crude traded slightly lower at the US$82/barrel level as demand concerns offset extension of voluntary production cuts by OPEC+ members while gold price closed at record high above the US$2,120/oz level in anticipation of potential interest rate cut going forward.
The FBM KLCI ended lower but managed to rebound and formed a hammer candle. The technical readings on the key index were negative with the MACD Histogram extending another negative bar while the RSI has declined below 70.
The resistance is envisaged around 1,545-1,555 while the support is set at 1,520-1,530. – March 6, 2024
