BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Despite a firm start to the day, the key index succumbed to profit taking as the day progressed with the key index surrendering some of the recent gains at yesterday’s close.
At the same time, the market also became increasingly toppish with follow-up buying interest having evaporated to leave the key index to drift in tune with most global equity indices.
Similar conditions also prevailed among the lower liners as many of these stocks lost further ground resulting in total losers overwhelming gainers.
With market conditions still overbought, we think that profit-taking activities could still dominate trades ahead of the weekend.
The end of the results reporting season could also see market becoming more tentative as there will be fewer near-term catalysts. At the same time, the recent gains are also leaving valuations on the toppish side.
Hence, the key index could instead look to consolidate its position around the 1,650 level for the time being while building up a base before attempting to push higher again at a later date.
The consolidation is deemed to be healthy as it would allow the FBM KLCI to take a breather after recovering some 8.5% from the early month sell-off.
Below the 1,650 support, the other support is at 1,645 points while the resistances are at 1,672 points and at the 1,680-1,685 levels respectively.
Malacca Securities Research
Sentiment on the local front turned negative as profit-taking emerged after strong foreign fund buying in the banking sector while small-cap stocks remained weak.
In the US, Wall Street had a mixed session with the Dow having reached new highs while the S&P and Nasdaq were weighed down by NVIDIA which fell despite exceeding expectations.
US preliminary GDP came in at 3.0% while unemployment claims declined slightly to 231,000 (previous reading: 233,000). Investors are now closely watching the core PCE (Personal Consumption Expenditures Price Index) data set to be released later tonight.
In the commodity markets, Brent crude rebounded after a two-day decline, driven by a suspension of exports from Libya while gold prices remained above US$2,500/oz, reflecting potential interest rate cuts by September.
Elsewhere, CPO (crude palm oil) prices also bounced back, trading above RM3,900/metric tonne with a positive outlook in the near term.
The FBM KLCI index ended lower towards the 1,653 level. However, 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 1,668-1,673 while the support is set at 1,633-1,653. – Aug 30, 2024
