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 continues to move higher but the gains were more minute yesterday as conditions become more subdued following the recent gains.
For much of the day, the market trended within a narrow range before an end-of-day push lifted the key index into the positive territory.
The broader market, however, was a sea of red with selling into strength dominating trades. As a result, market breadth was decidedly negative amid traded volumes that were little changed from a day earlier.
After successive sessions of gains that cumulated in the key index recouping all its steep losses and back above the psychological 1,600 level, market conditions are likely to become more tentative with market players awaiting the release of the country’s 2Q 2024 GDP (gross domestic product) data that could dictate Bursa Malaysia’s near-term direction.
The latest prognosis is for GDP growth to come in closer to the 6% year-on-year (yoy) mark following the stronger domestic activities and recovering external sector performance for much of the quarter.
Under the prevailing environment, there could still be minor gains with the 1,620- level remaining a formidable level for the key index to clear over the near-term with the ensuing resistance pegged at 1,625 points. The support, meanwhile, are at 1,610 and 1,605 points respectively.
Malacca Securities Research
Most indices turned negative except for the FBM KLCI, which managed to recover marginally at the end of the session due to buying support in banking heavyweights.
Meanwhile, US stock markets ended strongly after assessing declining Consumer Price Index (CPI) and Producer Price Index (PPI) data earlier this week coupled with stronger-than-expected retail sales.
This optimism brushed off concerns of economic recession while raising expectations that the US Federal Reserve will cut rates by 25 basis points in the upcoming September Federal Open Market Committee (FOMC) meeting. We believe this buying support may also return to local stocks.
In the commodity markets, Brent crude rebounded in light of better-than-expected economic data while gold price trended higher above the US$2,450/oz zone. Elsewhere, CPO (crude palm oil) prices are trending sideways around RM3,600-RM3,700/metric tonne.
The FBM KLCI index ended flat at the 1,612 level. The technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI stayed above 50.
The resistance is envisaged around 1,627-1,632 while the support is set at 1,592-1,597. – Aug 16, 2024
