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 was still on the uptrend, extending its gains for a third straight day. This time, the market was buoyed by JP Morgan’s upgrade on the country’s rating with the US equities’ continuing gains also helping to shore up sentiments further.
In the process, the key index also regained the 1,620 level at the close. The broader market also saw renewed buying interest that boosted market breadth to extend its stay in the positive territory. Also, traded volumes climbed back above 5 billion shares.
Near-term market conditions are likely to remain buoyant, supported by optimism of an US interest rate cut and the upgrade of the country’s rating that could encourage further interest in Malaysian equities.
Sentiments are also slowing picking up from the recent positivity in regional and key global indices that should also permeate to the local market.
There has also been a pick-up in foreign participation that would also help to keep the FBM KLCI on its upward trend for longer.
Collectively, these factors could help the key index to end the week on a firmer note as it could now look to stay above the 1,620 to retest the next hurdle at 1,625 points before the year-high level of 1,630 points is re-tested. On the downside, the supports are at 1,615 and 1,610 points respectively.
Malacca Securities Research
Sentiment on the local front stayed positive with the FBM KLCI, FBM70 and FBM Small Cap charged higher for the session as buying interest was observed in the broad market led by the construction sector.
Although the CPI (consumer price index) data came in below expectations, Wall Street saw both the S&P500 and Nasdaq retreated from their respective highs.
Currently, the market could be pricing in earlier interest rate cuts by the US Federal Reserve while monitoring the upcoming PPI (producer price index) data which will be released later tonight.
On the commodity markets, Brent crude traded sideways but supported above US$85/barrel while gold price climbed significantly above US$2,400/oz as inflationary pressure cooled. Meanwhile, CPO (crude palm oil) managed to rebound off the RM3,850/metric tonne level to close above RM3,950/MT.
The FBM KLCI index ended firmer towards the 1,623 level. The technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI surged above 50.
The resistance is envisaged around 1,638-1,643 while the support is set at 1,603-1,608. – July 12. 2024
