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 mounted a rebound following the gains on both regional indices and Wall Street overnight but the FBM KLCI ended the day off its intraday highs on quick profit taking actions.
Market breadth was positive with the market’s volume also rising for the day with plantation and telco stocks as the main movers although both construction and property stocks lagged.
In the broader market, conditions were also positive as most ower liners ended in the green.
Although encouraging, last Friday’s gains looked feeble as the rebound has yet to be convincing due to the still tentative buying interest.
At the same time, the gains in overseas markets were just seen as a knee jerk reaction as there is no change to the global economic fundamentals that are still mired in uncertainties over rising inflation and interest rates.
Therefore, we see Friday’s Wall Street weakness to also extend to the local equity market at the start of the week, thus may result in quick profit taking activities continuing from last Friday’s afternoon.
This could also see the key index surrendering some of Friday’s gains with the immediate support pegged at the 1,380 level.
Thereafter, the supports are at 1,376 and the year’s low at 1,372 points. The hurdles, on the other hand, are at the 1,388-1,390 points, and at 1,394 points respectively.
Malacca Securities Research
The FBM KLCI staged a rebound on Friday following the positive cues from global markets.
However, we opine that the rebound attempt may stall as Wall Street was hit by another wild swing on the back of rising inflation expectations as suggested in the University of Michigan consumer survey and potentially rising concerns of tightening monetary policies which could push the US economy into a recession.
Nevertheless, we still expect bargain hunting to emerge within the solid balance sheet companies and stable consumer stocks.
Commodities-wise, Brent crude price hovered around US$91/barrel while crude palm oil (CPO) price traded along RM3,800/metric tonne.
The FBM KLCI rebounded from its five-session losing streak but stayed below the daily EMA9 level. Technical indicators were negative as the MACD Histogram extended a positive bar while the RSI remained below 50.
Resistance is set along 1,400-1,430 while the support is envisaged along 1,355-1,365. – Oct 17, 2022
