BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The selling persisted yesterday, extending its losses for a second day, and resulted in the FBM KLCI shedding most of its recent gains as well slipping below the 1,540-support level.
For the most part, market sentiments remained cautious ahead of the upcoming US Federal Reserve interest rate decision with banking stocks among the key heavyweights that declined.
The broader market, meanwhile, was mixed with gainers and losers on parity while traded volumes slipped below the 4 billion shares mark.
The prevailing cautiousness appears more pronounced-than-expected with few market impetuses to renew interest among market players.
As a result, conditions become indifferent with the key index on its drifting mode for the past few sessions, unable to gather much traction due to few available catalysts to entice fresh buying.
However, the key index may mount a near-term rebound following the US Fed’s strongest hint that it may allow for three interest rate reductions this year.
While the interest rate decision was very much in line with expectations, it also reaffirms that the pivot in the interest rates will be positive for the economic and equity market undertone, albeit over a longer duration.
The key index’s rebound could allow it to retest the 1,540 resistance with the next hurdle pegged at the 1.545 level. The supports, meanwhile, are at 1,530 and 1,520 points respectively
Malacca Securities Research
The FBM KLCI traded another day lower with further profit taking activities seen across banking heavyweights.
Meanwhile in the US, all the three major benchmark indices surged towards their respective all-time-highs as the US Fed concluded the FOMC (Federal Open Market Committee) meeting, keeping the interest rate unchanged at 5.25%-5.55%.
Also, the US Fed pencilled in at least three rate cuts by 2024. Given this positive sentiment, we believe buying interest may spillover towards stocks on the local front.
On the commodity markets, Brent crude retreated, snapping a five-day winning streak but still hovering above US$86/barrel as the EIA weekly survey suggested that US oil stocks fell by 2 million barrels last week. The FCPO (crude palm oil futures), meanwhile, trended higher, securing above the RM4,300/metric tonne level.
The FBM KLCI index ended lower. The technical readings on the key index were negative with the MACD Histogram hovering flattish along 0 while the RSI is below 50. The resistance is envisaged around 1,555-1,560 while the support is set at 1,525-1,530. – March 21, 2024
