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 rebounded yesterday, buoyed by optimism that the US Federal Reserve could reduce interest rates as soon as in September that also allowed many regional equity indices to make headway.
On the key index, YTL Power led it higher after it reported a strong set of earnings. In the broader market, however, conditions remained subdued due to the continuing low following which left market breadth in negative territory.
However, traded volumes rose by some 14% but remained below 4 billion shares for the day.
Although the key index managed to recover yesterday, we see market conditions remaining tentative with the buying interest still tentative as the FBM KLCI tethers near its four-year highs.
At the same time, valuations are already fair following the recent upsides that could also make it difficult for the key index to post significant upsides over the near-term unless there are improvements in the market’s fundamentals.
The pullback among key global indices overnight could also weigh on Bursa Malaysia’s performance in the day ahead with profit taking re-emerging that to leave the key index to end the week on a losing note.
There is support around the 1,630-1,635 points, followed by the 1,625 level. The resistances, meanwhile, are at the psychological 1,650 level and 1,653 points respectively.
Malacca Securities Research
Local stocks traded mixed with investors favouring large-cap stocks (FBM KLCI up 0.4%) while avoiding smaller-cap companies (FBM Small Cap down 0.8%).
In the US, markets declined as all three major indices formed bearish engulfing patterns driven by a surge in US 10-year Treasury yields above 3.8%.
Traders are now focused on Jerome Powell’s speech at the Jackson Hole Symposium, looking for hints on the size of the expected rate cut in September. Additionally, new home sales data is due later tonight.
In the commodity markets, Brent crude rebounded after a four-day losing streak, supported by a drop in US inventories by 4.6 million barrels last week. Gold price fell below the US$2,500/oz level while CPO (crude palm oil) prices edged closer to the RM3,800/metric tonne mark.
The FBM KLCI index ended higher towards the 1,641 level. The technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,656-1,661 while the support is set at 1,621-1,626. – Aug 23, 2024
