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 made a strong push yesterday as banking stocks were chased up amid their stronger quarterly earnings performances.
In the process, the key index climbed past the psychological 1,650 level at the close – setting another four-year high.
Despite the firm close, the broader market was mostly lower amid the continuing lack of buying interest that left market breadth trapped in the negative territory.
Yesterday’s upsides exceeded expectations amid the continuing low market interest that has been the trend over the past few weeks.
It now depends on whether there will be follow through buying interest to nudge the key index past the 1,650 level convincingly.
However, with the buying interest still selective, further upsides could become more modest as the 1,650 level is seen as a major hurdle and may prove to be difficult to clear convincingly.
Quick profit taking activities could also emerge that could leave the key index to drift for the time being albeit the mildly positive conditions is expected to prevail for now. Below 1,650, there is support at the 1,645 and 1,640 levels while the resistances are at 1,653 and 1,660 points respectively.
Malacca Securities Research
The trading tone on the local front was mixed with traders focusing on blue-chip stocks while avoiding small caps and lower liners.
In the US, Wall Street ended slightly higher as consumer sentiment continued to improve in August, rising to 103.3 from 101.9 in July.
However, gains were limited as investors remained cautious ahead of Nvidia’s earnings report.
This week, investors will closely monitor key economic data, including (i) preliminary US GDP (Thursday); (ii) unemployment claims (Thursday); and (iii) core PCE (Personal Consumption Expenditures Price Index) data (Friday).
In the commodity market, Brent crude declined by more than 2.3% despite the on-going Middle East tensions and concerns over the oil fields shutdown in Libya.
Gold prices remained above US$2,500/oz, supported by expectations of an interest rate downcycle going forward while CPO (crude palm oil) prices closed above RM3,900/metric tonne driven by Indonesia’s plans for biodiesel policies.
The FBM KLCI index ended higher towards the 1,652 level. However, the technical readings on the key index saw the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,667-1,672 while the support is set at 1,632-1,637. – Aug 27, 2024
