BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Mild profit taking emerged yesterday, sending the FBM KLCI to a losing day as it was unable to build on the gains it attained a day earlier.
Market conditions turned wary and cautious following steep falls among Japanese and China equities.
Construction stocks re-emerged as the day biggest loser with most lower liners also ended in the negative territory.
Market breadth was also negative with market interest slipping by nearly a quarter from the day before to just 3.5 billion shares.
We continue to see near-term market conditions staying unsettled heading into the weekend as the still low buying interest is tempering the upside potential.
Although the odds of the US trimming interest rates in September have risen, the FBM KLCI continues to dither due to the already toppish conditions from the strong year-to-date (YTD) gains.
Also, the already fair valuations could make further gains more difficult to come by.
Therefore, the insipid conditions look to continue as the key index attempts to firm up a base around the psychological 1,600 level with the recent high levels remaining a challenge to clear unless there are improvements to the FBM KLCI’s fundamentals.
For now, the supports are pegged at 1,620 and 1,615 points while the hurdles are at 1,631 points and the 1,637-1,638 levels respectively.
Malacca Securities Research
Still, trading activities were unstable throughout the past few days on the local front with huge volatility, fluctuating between red and green on a daily basis after the US Federal Reserve is looking more dovish while the Bank of Japan (BOJ) is potentially looking for more rate hikes.
Meanwhile, the US stock markets traded lower as the ISM manufacturing index came in weaker than expected and may signal an economic slowdown while the 10-year bond yields fell below 4%.
Earnings-wise, Amazon reported slightly weaker revenue and dropped 5% post-market while Apple’s results beat estimates with its share price rose after-market.
In the commodity markets, Brent crude retraced slightly below US$80/barrel while gold price maintained above the US$2,440/oz zone. Elsewhere, CPO (crude palm oil) price declined below RM3,900/metric tonne.
The FBM KLCI index ended slightly below the 1,625 level. However, the technical readings on the key index were positive with the MACD histogram forming a rounding bottom formation while the RSI maintains above 50.
The resistance is envisaged around 1,640-1,645 while the support is set at 1,605-1,610. – Aug 2, 2024
