BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was more recovery on Bursa Malaysia last Friday with the FBM KLCI reclaiming the 1,500 level at the close with mild bargain hunting lifting the key index higher, mainly on plantation stocks.
The key index’s upside was also in tandem in the positivity among regional indices.
Conditions in the broader market, however, were subdued with many of the lower liner indices losing ground again amid quick profit ahead of the weekend. As a result, market breadth turned negative again.
After a two-day rebound, conditions on Bursa Malaysia are likely to turn volatile again following the rout on Wall Street last Friday.
Sentiments are set to turn cautious again with market players to weigh the possibility of more interest rate hikes in the months ahead that could send the global economy into further tailspin.
As a result, the downside bias is set to return with quick profit taking to take hold at the start of the week.
This also means that the 1,500 level is unlikely to hold amid the fresh selling with the FBM KLCI’s support now pegged at the 1,490-1,495 levels. Further below, the other support is at the 1,480 level while the hurdles are at the 1,505 and the 1,510 levels respectively.
Malacca Securities Research
The FBM KLCI extended gains to close marginally above the psychological 1,500 level on Friday, tracking the improved sentiment across regional markets last week.
However, the local bourse may be heading for a widespread sell-off following a sharp decline on Wall Street overnight after the US Federal Reserve’s chairman reiterated its hawkish tone to tame inflation.
We believe the US Fed’s interest rate decision going forward will continue to fuel market volatility. On the local front, investors may watch for Malaysia’s inflation rate at noon.
Commodities-wise, Brent crude price climbed above US$100/barrel while crude palm oil (CPO) traded above RM4,150/metric tonne.
The FBM KLCI ended the week slightly positive after the key index swung above the key 1,500 level. Technical indicators, however, remained mixed as the MACD Histogram extended a negative bar while the RSI hovered above 50.
Resistance is pegged along 1,530-1,550 while the support is envisaged at 1,450-1,465. – Aug 29, 2022
