BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities went nowhere last Friday as the key index lingered around the 1,600 level for most of the day before ending the day virtually unchanged.
The FBM KLCI was very much on a holding pattern due to the lack of fresh leads while trading among the index linked stocks were subdued.
Most sector indices, however, ended higher to allow market breadth to stay in the positive territory with traded volumes also little changed from a day before.
The key index could remain range-bound over the near-term as it looks to build up a firmer base around the 1,600 level – an area where there are also many technical hurdles.
The base building exercise could also allow some of its year-to-date (YTD) gains to be absorbed after their strong run-up has left valuation within the historical forward averages with fewer compelling buying opportunities.
At the same time, the base building would be helpful for the key index to gather more strength for potentially further gains over the medium term in tune with outlook for global equities that is set to improve when interest rates are reduced later in the year.
In the interim, the hurdles are at 1,608 and 1,614 points while the supports are at 1,595 and 1,590 points respectively.
Malacca Securities Research
The FBM KLCI pulled back for the third session in a row as profit taking activities emerged within the selected heavyweights but the FBM Small Cap managed to change towards a fresh 52 week high.
Over in the US, Wall Street ended mixed on Friday but closed significantly higher for the week as weaker consumer sentiment has re-ignited the expectations of an earlier interest rate cuts by the US Federal Reserve in 2024.
This week, inflation data like CPI (consumer price index) , PPI (producer price index), jobs data, industrial production and retail sales will come under the spotlight.
On the commodity markets, Brent crude has traded below US$83/barrel amid demand concerns while the gold price trended positively due to interest rate cut hopes. Meanwhile, the FCPO (crude palm oil futures) still trades within the range of RM3,800-RM3,900/metric tonne.
The FBM KLCI index ended mildly lower by consolidating around the 1,600 level. The technical readings on the key index were still positive with the MACD Histogram extending another positive bar while the RSI maintains above 50.
The resistance is envisaged around 1,615-1,620 while the support is set at 1,580-1,585. – May 13, 2024
