BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Market turned weaker again to end last week on a whimper following a subdued performance on Wall Street a day earlier.
As a result, most stocks retreated on quick profit taking with technology stocks the worst affected.
Lower liner indices like the FBM ACE and FBM Small Cap indices slumped as selling escalated that saw total losers thumping gainers by more than a 3-to-1 ratio. Traded volumes, however, were little changed with market participation staying mostly insipid.
Despite the continuing market volatility, stocks on Bursa Malaysia could again tip up after the strong run-up in US equities last Friday when the US Federal Reserve indicated that interest rates will be trimmed soon.
This should buoy sentiments on FBM KLCI-listed stocks again while enabling them to recoup some of Friday’s losses.
Amid the continuing volatility, however, fresh buying interest could still be tentative as the upsides may still be relatively benign.
At the same time, the key index continues to linger within the 1,630-1,650 levels which are its highest level in some four years that is also leaving valuations fair.
On the upside, the near-term resistances are at 1,643 and the psychological 1,650 levels while the supports are at 1,631 and 1,625 points respectively.
Malacca Securities Research
The local exchange ended on a negative note prior to the Jackson Hole Symposium in line with weak regional performances as profit-taking activities emerged.
However, positive sentiment was observed on Wall Street following Jerome Powell’s speech which suggested that the Fed might adopt a dovish stance in the upcoming FOMC (Federal Open Market Committee) meeting with a possible 25 basis point interest rate reduction.
Looking ahead, traders will be closely monitoring key economic data, including (i) consumer confidence (Tuesday); (ii) preliminary GDP (Thursday); (iii) unemployment claims (Thursday); and (iv) core PCE (Personal Consumption Expenditures Price Index) data (Friday).
In the commodity market, Brent crude surged above US$79/barrel while gold prices held steady above US$2,500/oz. Elsewhere, CPO (crude palm oil) prices rebounded significantly to surpass RM3,800/metric tonne as sentiment pointed towards positive demand from India ahead of the festive season (September-November).
The FBM KLCI index ended lower towards the 1,635 level. However, technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,650-1,655 while the support is set at 1,615-1,620. – Aug 26, 2024
