BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The upward streak remained on Bursa Malaysia at the end of last week to sustain its positive trend and enabled the key index to inch closer to the 1,670-level following the US Federal Reserve’s interest rate cut.
Much of the gains were from the buying interest of foreign funds to offset the net sell by local institutions and retail players.
Nevertheless, the broader market shares were mostly in the green with total gainers exceeding losers by a wide margin with traded volumes also tipping higher by another 5.0%.
We continue to see the Malaysian equity market’s undertone staying firm and the upsides should still prevail for the time being, buoyed by the positives from an interest rate cut in the US that is widely seen as positive for the country’s economy over the medium term.
However, the upsides could still be modest ahead as much of the positives are already affected in the FBM KLCI’s strong YTD (year-to-date) gains with valuations also well within its historical forward averages.
At the same time, domestic leads remain scant which could further limit the upside potential over the near term.
We do not rule out bouts of profit taking at the start of the week despite conditions still firm, hence the 1,670 level will be the immediate hurdle, followed by the 1,675 level. On the downside, the immediate support is at the 1,665 level, followed by the 1,660 level.
Malacca Securities Research
Last week, local stock markets ended on a positive note following the Fed’s rate cut. Similarly, US stock markets also saw strong momentum as the Dow approached its all-time highs.
This week, market participants will focus on key economic indicators, including (i) manufacturing and services PMI; (ii) US final GDP data; (iii) unemployment claims, and (iv) core PCE index.
In the commodities market, Brent crude is trading closer to US$75/barrel amid on-going tensions in the Middle East while gold prices have surged to a new all-time high above US$2,600/oz.
Meanwhile, crude palm oil (CPO) ended the week on a stronger note after India raised its basic import tax on crude and refined edible oils by 20 percentage points to 27.5%.
The FBM KLCI index closed higher towards the 1,668 level. Also, the technical readings on the key index were positive with the MACD histogram having turned into the positive territory and the RSI stayed above 50.
The resistance is envisaged around 1,683-1,688 while the support is set at 1,648-1,653. – Sept 23, 2024
