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 managed to post a turnaround in the afternoon session to regain the psychological 1,450 level at the end of last week.
The intraday rebound was due in part to the emergence of light bargain hunting after its weakness for most of the week.
Also, the rebound among regional equities helped the key index’s recovery that also spread to many lower liners and helping market breadth to return to the positive side. Traded volumes remained decent at above 3.0 billion shares for the day.
Although the FBM KLCI managed to regain the 1,450 level at the close of last week, market conditions remain precarious due to uncertainties in its direction that is also in tandem with the prevailing challenging conditions among global equities.
As it is, global equities are still affected by the US Federal Reserve’s intent of keeping interest rate high for longer that could also affect economic growth.
There are also few domestic leads to encourage market players and many will still be on a wait-and-see stance.
However, there could still be sustained bargain hunting to help the key index stay within its range-bound trend of the 1,450-1,463 levels over the near term albeit any near-term upsides could be mild due to the few market impetuses.
Before that, we do not rule out mild profit taking at the start of week before buying emerges later in the session that could help the key index remain within its base building pattern. Apart from the above levels, the other support and resistance levels are at 1,443 and 1,456 points respectively.
Malacca Securities Research
The FBM KLCI rebounded from the intraday low and closed above the 1,450 level last Friday.
However, Wall Street continues to stay in the negative region for the fourth session with the expectation of slightly hawkish tone from the US Fed coupled with the concern over a government shutdown in the US.
We believe the selling pressure may spill over to stocks on the local front. Nevertheless, we opine that the downside risk should be limited as investors may focus on the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP 2030) blueprints as well as the Budget 2024 in the upcoming month.
Commodities-wise, Brent crude has continued retraced from the recent high and traded below the US$93/barrel level while crude palm oil (CPO) prices extended its pullback formation below the RM3,700/metric tonne level.
The FBM KLCI ended higher marginally surpassing the 1,450 psychological level. Also, the technical readings on the key index were negative with the MACD Histogram forming the first negative bar while the RSI dropped below 50.
The resistance is located around 1,465-1,470 while the support is envisaged around 1,430-1,440. – Sept 25, 2023
