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 rebounded yesterday in tandem with the gains in regional indices that reacted positively to the US Federal Reserve’s hint of three interest rate cuts this year.
However, the key index’s recovery was relatively mild as it just managed to climb back above the 1,540 level at the close after a fairly lacklustre session.
Nevertheless, the positivity helped the broader market to make further headway and gainers to beat losers by a comfortable margin. Traded volumes rose slightly back above the 4 billion shares level.
Despite yesterday’s recovery, we see market conditions as being still largely insipid, devoid of significant buying interest as market players are still uncertain of the key index’s direction.
The US Fed’s reiteration of its impending interest rates cuts may bolster the demand for Malaysia’s exports in due course but it has yet to provide significant impetus to the stock market, hence this could leave the key index just to make small strides ahead.
In the meantime, the sustained gains on Wall Street overnight should generate some mild bargain hunting and enabling the key index to end the week on a firmer note.
This should keep the key index above the 1,540 level as it now looks to re-test the next hurdles at the 1,545 and 1,550 levels. On the flipside, the supports are at 1,530 and 1,520 levels respectively.
Malacca Securities Research
The FBM KLCI rose after a two-day pullback lifted by selected heavyweights within the telco, banking and plantation sectors.
Again, sentiment in the US stock markets was positive following dovish statements from the US Fed’s FOMC ((Federal Open Market Committee) meeting which contributed to an extended rally within the technology sector on expectations of three rate cuts in 2024.
With this positive trading activity in the US, we opine that the buying support should spillover to stocks on the local front.
On the commodity markets, Brent crude retreated for the second day but still hovering above the US$84/barrel level while crude palm oil (CPO) traded sideways within RM4,200-RM4,300/metric tonne. Meanwhile, gold prices surged towards US$2,222/oz before closing below the US$2,200/oz level.
The FBM KLCI index ended higher. The technical readings on the key index were mixed with the MACD Histogram hovering flattish along 0 while the RSI is above 50. The resistance is envisaged around 1,555-1,560 while the support is set at 1,525-1,530. – March 22, 2024
