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 not only mounted a quick rebound but also recovered firmly to test the 1,630 level in yesterday’s trade.
As it is, buying interest were still strong, particularly from foreign funds that helped to lift the key index to its another highest level in over three years and shrugging off the insipid conditions among regional indices.
The lower liners also followed suit as traded volumes surged past 6 billion shares in tandem with market breadth that turned positive again.
Although the market undertone remains largely positive, Malaysian equities may follow global and regional equities to head lower over the near-term with profit taking activities to return again.
This is after sentiments on global equities are affected by the increased likelihood of higher-for-longer interest rates due to the sticky inflationary conditions.
As such, cautiousness could prevail and this could leave the FBM KLCI to drift at the end of the week’s trade.
Market players could opt to lock-in some profit after much of the positivity of the better-than-expected 1Q 2024 GDP (gross domestic trade) is already reflected in the recent market run-up with market players now awaiting the release of more corporate results to assess their prospects for the upcoming quarters.
In the interim, there should be support at the 1,600-1,622 levels, followed by the 1,610 level. The 1,630 level is the immediate hurdle, followed by the 1,640 level.
Malacca Securities Research
After a brief pullback, the FBM KLCI charged towards fresh 52-week high with the support of utilities heavyweights while the FBM ACE started to break its 52-week high.
Meanwhile, sentiment on Wall Street was mixed despite (i) better-than-expected results from NVIDIA, (ii) better-than-expected manufacturing and services PMI data and softer-than-expected new homes sales.
Given the mixed trading on Wall Street coupled with weaker quarter-om-quarter (qoq) results on the local corporate scene recently, we expect profit taking to emerge on the local exchange.
On the commodity markets, Brent crude traded lower with a negative bias trading environment with the upside capped around US$D83-US$84/barrel. Meanwhile, gold price which extended its pullback could be heading towards the support level of US$2,324/oz.
The FBM KLCI index rebounded, close to breaching the 1,630 level. The technical readings on the key index were mixed with the MACD Histogram extending another positive bar while the RSI was overbought.
The resistance is envisaged around 1,645-1,650 while the support is set at 1,610-1,615. – May 24, 2024
