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 still closed lower yesterday but the losses were relatively minute as it managed to claw back most of its intraday losses to keep it above the 1,440 level at the close.
Profit taking activities remain prevalent among the key index constituents after their recent gains with energy stocks falling the most during the day.
Although the broader market indices were mixed, market breadth remained on the negative side with market interest seeing minor improvements.
After three consecutive sessions of pullback, the selling is looking to ease – judging by the emergence of mild bargain hunting towards the end of yesterday’s session.
This raise hopes for the key index to find support around its 200-day moving average level that could also leave the key index on a positive bias.
It would also allow for the bouts of bargain hunting to remain and to provide the much-needed support to sustain the bullish streak.
However, there could still be choppiness over the near-term, in tandem with the increased volatility among global indices that are still reacting to the downgrade of the US’ credit rating as well as profit taking actions after the strong rally in global equities recently.
For now, the 200-day support at 1,437 points should hold but if it gives way, the supports are lowered to 1,433 points and 1,430 points respectively. The hurdles remain at 1,455 points and the recent high of 1,460 points.
Malacca Securities Research
The FBM KLCI recorded its third day of losing streak accompanied by lower trading value, spooked by the renewed volatility on Wall Street overnight.
We believe the local bourse performance may mirror the weaker sentiment from Wall Street and the regional markets.
Nevertheless, investors may position themselves ahead of the Malaysia state elections and the August quarterly reporting season.
Elsewhere, the focus may shift towards the release of unemployment data in the US tonight to provide further clues on the US Federal Reserve’s next action.
Commodities-wise, Brent crude rallied above US$85/barrel after OPEC and Russia are committed to extend production cuts into September 2023 while crude palm oil (CPO) hovered around RM3,900/metric tonne.
The FBM KLCI recovered most of its intraday losses to form a hammer candle as the key index defended the SMA200 level yesterday. Technical indicators were mixed as the MACD Histogram has turned negative while the RSI remain above 50.
The immediate resistances are located along 1,460-1,480 while the support is pegged around 1,400-1,420. – Aug 4, 2023
