BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Despite making little headway for much of the day, the key index ended the day with decent gains as stronger buying emerged towards the end of yesterday’s session to lift it to the 1,665-level following the US Federal Reserve’s interest rate cut.
The positivity was also widespread among the lower liners as they too sustained their recovery from their deeply oversold conditions that saw total gainers outpacing losers nearly on a 3-to-1 ratio. Traded volumes were also firmer, surging some 75% to 4.0b units for the day.
Market conditions are likely to stay sanguine, boosted by positivity from the Fed’s interest rate cut and the increased odds for another one or two cuts for the remainder of the year.
While the FBM KLCI have largely priced-in the initial interest rate cut, it could now be strengthened further by the probability of further interest rate cuts ahead.
At the same time, market sentiments are improving due to the country’s stronger corporate fundamentals that will be supportive of further upsides ahead albeit the gains could be more modest after the FBM KLCI’s strong YTD year-to-date) gains that has reflected much of the improved outlook.
In the near term, we see the FBM KLCI staying steadfast as it now looks to target the 1,670 and 1,675 levels, taking cue from the strong overnight gains among key global indices. The supports, meanwhile, are at 1,660 points and 1,655 points respectively.
Malacca Securities Research
Overall, the local market reacted positively, cheering the Fed’s interest rate cut in the recent FOMC (Federal Open Market Committee) meeting.
In the US, Wall Street also rebounded sharply after cautious trading in the previous session as weekly unemployment claims came in below expectations at 219,000 vs consensus estimates of 230,000.
Besides, traders reassessed the rate cut, shifting the narrative from recession concerns to extending economic expansion by the Fed.
In the commodities market, Brent crude continued to rebound due to lower US inventories and rising tensions in the Middle East. Gold prices edged closer to US$2,600/oz following the US rate cut while crude palm oil (CPO) traded near RM3,900/metric tonne amid production concerns in Malaysia.
The FBM KLCI index closed higher towards the 1,665 level. Also, the technical readings on the key index were positive with the MACD histogram turned into the positive territory and the RSI stayed above 50.
The resistance is envisaged around 1,680-1,685 while the support is set at 1,645-1,650. – Sept 20, 2024
