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 consolidate, shedding another 5.4 points to slip below the 1,670 level at yesterday’s close on increased profit taking.
The losses mostly emerged in the afternoon session as mild buying support helped lift the key index into the positive territory in the morning session.
Conditions in the broader market was more subdued as selling resumed, resulting in losers more than twice the number of gainers. Traded volumes also rose by 8% due to the higher selling pressure.
We see market conditions staying insipid heading into the weekend in the absence of fresh leads with the largely wait-and-see sentiments likely to prevail for now.
As we have noted, the key index could be attempting to build-up a base around the 1,650 and 1,680 levels with most of the market’s positives already reflected from the FBM KLCI’s near 15% YTD (year-to-date) gains that also resulted in its valuations already at fair levels.
At the same time, there are also fewer available leads from key global equity markets with participants waiting for confirmation of US interest rate cuts.
Therefore, the key index could still consolidate with the 1,660 now becoming its immediate support, followed by the 1,655 level. The hurdles, meanwhile, are at 1,670 and 1,675 points respectively.
Malacca Securities Research
The negative sentiment persisted on the local front, leading to another round of broad-based sell-offs with the technology sector being hit the hardest as the AI (artificial intelligence) -driven rally fizzled out following Nvidia’s weaker guidance.
Meanwhile, US stock markets ended on a mixed note as August private payrolls grew by only 99,000, the smallest increase since 2021 and well below the consensus estimate of 140,000 which signals a weakening labour market.
Looking ahead, traders will be closely monitoring the non-farm payroll report due later tonight which could influence the extent of the interest rate reduction at the upcoming FOMC (Federal Open Market Committee) meeting.
In the commodity markets, Brent crude remained below US$73/barrel due to softer demand from China and the US despite OPEC+ having delayed a production hike for October and November. Gold prices remained above the US$2,500/oz level while CPO (crude palm oil) prices hovered above RM3,900/metric tonne.
The FBM KLCI index ended lower towards the 1,664 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 1,679-1,684 while the support is set at 1,644-1,649. – Sept 6, 2024
