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 slid further on Friday, slipping below the psychological 1,600 level to close off the week on a sombre note.
Much of the selling emerged in the afternoon session as foreign funds continues to reduce their holding of Malaysian equities.
The downtrend was also very much in tune with the regional equity markets’ weakness on fears of increased trade disputes and fewer interest rate cuts ahead. Most broader market shares also lost ground and market breadth stayed on the negative side.
The incessant sell-down by foreign funds, coupled with the increasing economic headwinds, is likely to leave market sentiments still on the wary side for the time being.
Furthermore, there are also few market positives to provide confidence to the market players and this could leave the market on a drifting trend.
Still, the FBM KLCI could be angling for a positive start to the week as mild bargain hunting may emerge on some of the beaten down stocks from last week with domestic institutions likely to provide support ahead of the midweek Christmas break.
This could also be seen as mild window dressing activities as the key index looks to end the year around the psychological 1,600 level. The immediate supports are around the 1,585-1,590 level, followed by the1,580 level.
The interim resistance is at 1,595 points, while above the 1,600 level, the other hurdle is at 1,605 points.
Malacca Securities Research
The local bourse closed below the 1,600 mark as the key index is set to be effectively re-balanced following last month’s index review.
Foreign investors remained net sellers while traders reduced their exposure ahead of the year-end season.
In the US, all three indices rebounded last Friday as the PCE (Personal Consumption Expenditures Price Index) data rose at its slowest pace since May, likely re-assuring policymakers and investors that inflation is cooling alongside a growing economy.
This week, some markets, including the US, UK and Hong Kong, will experience early closures on Tuesday (Dec 24) ahead of Christmas and Boxing Day.
In the commodities market, Brent crude continued to trade sideways, hovering around US$72-US$73/barrel. Gold prices ended marginally higher around the US$2,620/oz level while CPO (crude palm oil) prices declined further to trade below the RM4,500/metric tonne level.
The FBM KLCI closed below the 1,600 psychological level and continued to trend below all the moving average lines. The MACD histogram has formed a new negative bar and the RSI is trending below 50, suggesting negative momentum at this current juncture.
Resistance is anticipated around 1,606-1,611 while support is set at 1,571-1,576. – Dec 23, 2024
