BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Bursa Malaysia stocks stumbled on Friday as sentiments were affected by renewed US recession fears that could prompt a global stock market sell-off.
As a result, selling was prevalent among the key index stocks, sending it back to the 1,611 level at the close.
In the broader market, selling was also widespread with the FBM ACE and FBM Small Cap indices shedding some 3.0% each as decliners beat gainers by a significant 8-to-1 margin. There was also a 47.0% jump in traded volumes to 5.2 billion shares.
With global equity markets gripped by renewed fears of slower global economic growth, market conditions are likely to stay cautious with the flight-to-safety likely to prevail for now.
As it is, market sentiments have taken a dive with selling looking to sustain, particularly on stocks that have risen significantly over the past few months.
Although there should be further weakness at the start of the week, selling pressure among the key constituents could remain relatively moderate, finding some support due to their still mostly fair valuations.
Therefore, the 1,600 level could provide strong support for now with the interim support seen at around the 1,605 level. On the flipside, the immediate hurdle is at 1,615 points, followed by the 1,620 level.
Malacca Securities Research
Last Friday, selling pressure picked up on the local front following the negative performance on Wall Street.
A huge sell-down was noticed in the broader market where only about 10.5% of stocks traded higher.
Meanwhile, the US stock markets further declined with a weaker jobs report, triggering the Sahm Rule and raising concerns over a potential economic recession.
The Dow fell below 40,000 while the Nasdaq dropped more than 2.4%. This week, traders will be watching the ISM Services PMI (Purchasing Managers’ Index) and unemployment claims on Thursday.
In the commodity markets, Brent crude dropped more than 3% to near the support level of US$76/barrel while the gold price trended near US$2,440/oz. Elsewhere, CPO (crude palm oil) price rebounded off the RM3,850/metric tonne zone.
The FBM KLCI index ended significantly lower towards 1,611 level. The technical readings on the key index were negative with the MACD histogram forming another negative histogram bar and the RSI dipped below 50.
The resistance is envisaged around 1,626-1,631 while the support is set at 1,591-1,596. – Aug 5, 2024
