BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks made a strong upward move last Friday, sustaining their gains from a day earlier to end the week near the psychological 1,450 level.
This follows hopes that the US Federal Reserve may have ended its interest rate hikes that buoyed sentiments in most global equities.
The lower liners also benefited from the improved sentiments with most stocks marching higher and market breadth staying well in the positive territory. At the same time, the return of buying interest also lifted traded volumes.
With hopes that the US Federal Reserve is done with hiking interest rates, the global equity market undertone is turning more positive, largely on hopes that a soft landing to the global economy can be attained as inflation is also markedly lower.
This should allow for the near-term positivity to also sustain on Bursa Malaysia and stocks are likely to make further headway, riding on the improved sentiments.
Such development could see the FBM KLCI moving past the 1,450 level at the start of the week with ease albeit the gains could become tamer after last Friday’s uptrend with mild profit taking emerging to slow down its ascend.
Still, the upsides are welcomed as the key index was looking meek just a week ago and the improved outlook could now help it to break its downward streak.
Above the 1,450 level, the hurdles are at the 1,452-1,455 levels and at 1,460 points respectively. The supports, meanwhile, are at the 1,445-1,447 levels and at 1,440 points.
Malacca Securities Research
Finally, the FBM KLCI has experienced a breakout from the narrow range in tandem with sentiment from the regional benchmark indices coupled with the positive performance on Wall Street overnight.
Given the 10-year US Treasury yield is off the highs of 5% following the softer-than expected jobs report, investors should be pricing in lower probability of a rate hike by the US Fed in December.
Also, we expect buying interest to spill over to stock on the local front as we head into the financial reporting season.
With the softer expectation of a rate hike, the ringgit has strengthened further towards RM4.726 against the greenback.
On the commodity markets, Brent crude prices eased more than 2% amid fading geopolitical tension while crude palm oil (CPO) traded above RM3,700/metric tonne.
The FBM KLCI ended higher, and experienced a flag formation breakout. The technical readings on the key index are positive with the MACD Histogram being marginally above zero while the RSI hovers above 50.
The resistance is pegged around 1,460-1,470 while the support is at 1,430-1,440. – Nov 6, 2023
