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 mounted a quick rebound yesterday to reclaim the losses a day earlier and to also climbed back to the 1,615 level at the close.
Market conditions were buoyed by the gains among key global indices a day earlier with the key index’s performance also mirroring the gains among regional indices on expectation that global interest rates could be reduced in 3Q 2024.
Broader market shares also followed suit, allowing for market breadth to return to the positive side.
Near-term market conditions are looking healthier after the key index managed to regain its traction yesterday as this provides hope for the FBM KLCI to end the week on a firmer note.
As it is, the market’s undertone remains relatively firm as it was well-supported following its recent pullback to adjust from its bout of overbought.
With conditions tipping into oversold, the recovery could also extend for now with recovery efforts being bolstered by the continuing gains in key global indices overnight as the first US interest rate reduction may materialise sooner due to its weakening economic indicators.
This follows the European Central Bank’s (ECB) move in trimming its interest rate by 25 basis points yesterday albeit further cuts may still be some time away.
On the upside, the key index may now target the 1,620 level which is followed by the 1,625 level. The supports, meanwhile, are at 1,610 points and the psychological 1,600 level respectively.
Malacca Securities Research
After a volatile move in the past few sessions by fluctuating between the negative and positive territories, the FBM KLCI has finally stabilised above the 1,600 level with the boost from utilities heavyweights.
Meanwhile, the US stock markets traded mixed ahead of the jobs report that will be released later today.
Nevertheless, we believe traders and investors could be re-assessing the corporate earnings and position for trading opportunities in 2H 2024.
On the commodity markets, Brent crude had rebounded following interest rate cuts actions by Canada and Europe despite EIA indicating that the US oil inventories had risen last week. Meanwhile, the FCPO (crude palm oil futures) gained momentum overnight above the RM4,000/metric tonne level.
Likewise, gold price has started to climb with the expectation of a potential earlier interest rate cut by the US Federal Reserve.
The FBM KLCI index ended higher by returning briefly to the 1,615 level. The technical readings on the key index were mildly positive with the MACD Histogram extending a less negative bar while the RSI maintains above 50.
The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. – June 7, 2024
