BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There were more mild upsides on Bursa Malaysia yesterday with the key index tipping higher on continuing nibbling of selected heavyweights that helped to lift the key index closer to the 1,620 level at the close.
Overall market conditions were also firmer on speculation that US interest rates will be trimmed soon. This enabled market breadth to turn positive albeit marginally with many lower liners also mounted mild recoveries.
We see near-term market conditions holding steady, buoyed by hopes that the US Federal Reserve could start trimming interest rates by September this year.
However, the gains are likely to remain minute as the buying interest is still relatively benign with follow-through buying interest appears to be mild.
Although this could still shore up the key index, the 1,620 could now become a significantly hurdle for the key index to pass with the FBM KLCI likely to linger around the level and may find the year high of 1,629 points a formidable level to clear unless there are noticeable improvements in the prospects for corporate earnings growth ahead.
Therefore, the key index could tether around the 1,610 and 1,620 levels for the time being with the ensuing hurdle set at 1,625 points while the other support is at 1,605 points.
Malacca Securities Research
The FBM KLCI and FBM70 managed to close higher but the Small Cap index slid marginally.
We expect buying interest to stay firm supported by the performance on Wall Street.
In the US, comments from Fed chairman Jerome Powell in the two-day testimony where he expressed concerns that the higher-for-longer interest rate environment may slow down the economic growth have boosted appetite in Wall Steet.
The S&P500 and Nasdaq marked new territories led by technology-related stocks while the Dow added 1.1%.
Still, investors will be monitoring the upcoming CPI (consumer price index) and PPI (producer price index) data later today and tomorrow.
On the commodity markets, Brent crude has rebounded off the support around US$84/barrel to settle above US$85/barrel while gold price has climbed gradually higher above US$2,370/oz. Meanwhile, CPO (crude palm oil) has fallen six consecutive days to trade below RM4,000/metric tonne.
The FBM KLCI index ended higher towards the 1,618 level. The technical readings on the key index were positive with the MACD histogram forming another positive bar and RSI surged above 50.
The resistance is envisaged around 1,633-1,638 while the support is set at 1,598-1,603. – July 11, 2024
