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 made a strong end to the week, taking out the 1,620-resistance level on firmer support from foreign funds following release of the country’s stronger-than-expected 2Q 2024 GDP (gross domestic product) report.
The positivity also extended to the broader market shares with the FBM Small Cap and FBM ACE indices recording gains of some 1.5% each.
As a result, market breadth was comfortably in the positive territory albeit traded volumes fell by nearly 10% to just 3.2 billion shares for the day.
With the market’s undertone remaining sanguine, the on-going upsides are likely to be reserved at the start of the week.
As it is, optimism is gaining after the strong 2Q 2024 GDP report that has raised optimism that the positive growth trend will continue into 2H 2024 with growth possibly coming in at the upper range of Bank Negara Malaysia’s 4%-5% yoy (year-on-year) growth for the year.
At the same time, the buoyant global equity markets should also provide more impetus for Malaysian stocks to sustain their near-term upsides.
Nevertheless, we see further gains becoming more modest as the key index approaches its highest level in over two-years again and conditions are becoming more toppish as the recent recovery could have run its course.
On the upside, the hurdles are at the 1,625-1,627 levels and at 1,631 points respectively. The supports, on the other hand, are at 1,620 points and 1,615 points respectively.
Malacca Securities Research
All major indices on the local front ended on a positive note following Malaysia’s GDP growth of 5.9% in 2Q 2024.
However, the telco and media sub-index was the only one to close slightly lower for the session.
In the US, Wall Street traded positively after evaluating the stable decline in inflation data (CPI and PPI), along with stronger retail sales and an increase in US consumer sentiment which rose to 67.8 from 66.4 in July.
We believe traders will continue to focus on the Fed, as there is potential for an interest rate cut next month which could translate to positive trading sentiment in the US.
In the commodity markets, Brent crude declined due to easing tensions in the Middle East while gold price surged to a new high above the US$2,500/oz mark. CPO (crude palm oil) prices, meanwhile, trended below RM3,700/metric tonne for the session.
The FBM KLCI index ended higher towards the 1,623 level. The technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI stayed above 50.
The resistance is envisaged around 1,638-1,643 while the support is set at 1,603-1,608. – Aug 19, 2024
