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 ended yesterday with minute losses as the Malaysian stock market looked to find some stability after the recent steep falls.
Fresh buying interest became more selective after a two-day recovery with market players assessing the prospects of further near-term upsides.
Most lower liners also retreated with construction stocks the day’s big losers. This also saw market breadth turning negative with traded volumes thinning further to 4.3 billion shares for the day.
After yesterday’s pause, bargain hunting could resume ahead of the weekend, taking cue from the strong performance on Wall Street overnight.
This could allow the key index to find more stability as well as to cast aside some of the near-term market tentativeness.
As it is, many market players are still assessing the state of the global economy amid the prognosis of continuing headwinds ahead, even as a US interest rate cut appears to be in the offing.
Still, the upsides could be relatively modest for now as buying interest may remain light due to lack of impetuses and the continuing wariness over the market’s direction.
As such, the psychological 1,600 level is likely to be the main hurdle for now with the immediate resistance pegged at the 1,595 level. The supports, on the other hand, are at 1,585 and 1,575 points respectively.
Malacca Securities Research
After traders scooped up shares during the “Black Monday” sell-off, the broader market slipped marginally as profit-taking activities emerged.
However, we believe this reaction is overdone and it could be timely for the rebound to gain further momentum.
In the US, stock markets rebounded significantly overnight following the release of softer-than-expected unemployment claims, suggesting that the job market is resilient at this juncture.
Additionally, some corporate results posted after-market hours were decent, supporting overall sentiment. We expect buying interest to sustain and spill over to local stocks.
In the commodity markets, Brent crude strengthened amid on-going geopolitical tensions in the Middle East while gold price gained momentum by rising above US$2,420/oz. Elsewhere, CPO (crude palm oil) is trading slightly above RM3,700/metric tonne.
The FBM KLCI index ended marginally lower towards 1,590 level. The technical readings on the key index were negative with the MACD histogram forming another negative bar and the RSI recovered above the oversold level.
The resistance is envisaged around 1,605-1,6110 while the support is set at 1,570-1,575. – Aug 9, 2024
