BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index ended last week with minor gains to extend its recovery streak, closing-in on the 1,620 level which it re-tested during the session.
However, intraday profit taking trimmed the day’s gains after the key index reacted mildly to the Europe’s move to trim interest rates.
In the broader market, however, conditions were firmer as their recovery picked up pace that allowed gaining stocks overwhelming losers by a wide margin and traded volumes rising above 5 billion shares again.
Near-term market conditions are likely to remain stable as the market continues to digest the recent market volatility and await further cues from the US Federal Reserve on its interest rate moves following the European Central Bank’s (ECB) lead in reducing interest rates.
Back home, the market will be assessing the impact of the free float diesel pricing mechanism on the economy with the inevitable rise in transportation cost that may see a temporary jump in inflationary pressure over the coming few months.
As the market moves into a wait-and-see stance, the key index could be hovering between the 1,600 and 1,620 levels for now as it also looks to build up a base around that level. There is an interim support at the 1,610 level while the resistances are at 1,625 points and the most recent high of 1,632 points respectively.
Malacca Securities Research
After violating below 1,600 during the MSCI rebalancing in May, the FBM KLCI managed to rebound higher for the week, supported mainly by the utilities heavyweights.
Over in the US, the sentiment turned negative as unemployment rates were higher than expected and the better-than-expected jobs data delayed the expectations of an earlier rate cut.
For this week, we believe the diesel hike that was announced over the weekend may affect market sentiment, capping the upside potential for the near term.
On the commodity markets, Brent crude has pulled back after hitting the US$80/barrel resistance while gold has tanked more than 3% after the stronger US jobs report which has cooled the rate-cut hopes.
The FBM KLCI index ended higher breaking above the 1,615 level. The technical readings on the key index were positive with the MACD Histogram forming a rounding bottom formation while the RSI maintains above 50.
The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. – June 10, 2024
