BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Stocks in Bursa Malaysia were mostly higher yesterday having taken cue from the more positive global equity market undertone.
However, the FBM KLCI remains weak, undermined by continuing profit taking by foreign fund that left it to drift further after surrendering its morning session gains.
In the broader market, conditions were more upbeat as a mild recovery set-in to break the downtrend and market breadth turned positive.
However, market interest continues to thin with only 2.6 billion shares traded yesterday.
Despite the key index’s continuing insipid trend, the market appears to be finding some measure of support, albeit at a lower level.
This is boosted by the recovering key global equity indices that should also permeate to stocks on Bursa Malaysia as market players are now anticipating a US interest rate cut next week that could start a down cycle in interest rates albeit the prediction is for a 25 bps (basis points) cut in interest rates which is lower than the previous estimate.
Nevertheless, we think the key index could look to end the week on a positive note even as fresh buying interest is still relatively benign.
This could see the key index breaking its downward spell and head back above the 1,640 with the immediate target set at 1,643-1,647 points, followed by the psychological 1,650 level. The supports, meanwhile, are at 1,635 and 1,630 points respectively.
Malacca Securities Research
The FBM KLCI declined marginally but the Small Cap index managed to rebound as bargain hunting activities emerged in tandem with the crude oil price.
Meanwhile, Wall Street managed to trade higher for the fourth session despite core PPI (producer price index) data came in slightly above consensus estimates at 0.3%.
Unemployment claims were also modestly higher which gave rise to the market to continue speculate that the US Federal Reserve will be introducing a rate cut next week. At this juncture, the expectation of the cut is at least 25 bps.
In the commodities market, crude continues to rebound by having traded above US$72/barrel as Hurricane Francine may affect supply in the near term. Meanwhile gold price shot towards a new high above the US$2,555/oz level with crude palm oil (CPO) remaining positive but still below the RM3,900/metric tonne mark.
The FBM KLCI index closed lower towards the 1,638 level. Additionally, the technical readings on the key index were negative with the MACD histogram forming another negative bar and the RSI dipping below 50.
The resistance is envisaged around 1,653-1,658 while the support is set at 1,618-1,623. – Sept 13, 2024
