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 succumbed to profit taking ahead of the weekend with the key index closing a shade below the 1,620 level.
Market conditions were generally more tepid after three consecutive days of gains that allowed the key index to recapture the psychological 1,600 level.
In the broader market, conditions also turned more subdued with most stocks ending the week lower, leaving market breadth on a negative note. At the same time, traded volumes slipped below 5 billion shares for the day.
Near-term market conditions are likely to stay mostly positive, underpinned by the continuing prospects of monetary easing in the US as its economy and inflation cools further, opening the door for a potential first interest rate cut in September.
The cut is likely to bolster demand for Malaysia’s exports and strengthen the ringgit against the US dollar in due course.
In the interim, the key index could remain relatively steadfast and make a pass at the 1,620 level again as the bouts of mild bargain hunting could continue.
At the same time, foreign funds may also continue to pick up some of the recent laggards to allow the key index to regain its near-term upsides.
Beyond the 1,620 level, the resistances are at 1,625 and 1,630 points respectively. On the downside, the supports are at 1,615 points and 1,610 points respectively.
Malacca Securities Research
The FBM KLCI and FBM70 ended lower but investors have been positioning for small cap stocks by having pushed the FBM Small Cap for a positive closing on Friday led by the transportation and construction sectors.
Meanwhile, the US stocks markets surged on Friday after assessing the PPI (purchaser price index) data (increased +0.2% in June).
For this week, traders will be monitoring the release of China’s GDP (gross domestic product) while watching out (i) core retail sales; (ii) industrial production; and (iii) unemployment claims as well as the US corporate earnings.
On the commodity markets, Brent crude is ranging along US$84-US$85/barrel while gold is holding firmly above US$2,400/oz in view of weaker US dollar after pricing in the rate cuts in 2H 2024. Elsewhere, CPO (crude palm oil) has rebounded off RM3,900/metric tonne.
The FBM KLCI index ended lower towards the 1,619 level. The technical readings on the key index were still positive but the MACD histogram formed a rounding top formation recently and the RSI remains above 50.
The resistance is envisaged around 1,634-1,639 while the support is set at 1,599-1,604. – July 15, 2024
