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 was still down-trending yesterday, extending its consolidation spell on continuing profit taking by foreign funds to leave it at a two-week low.
Market conditions were also largely directionless due to few available leads, both from local and overseas sources, hence causing the key index to mirror Wall Street and to end the day on a weak note.
The broader market fared slightly better but overall conditions were still mixed with market breadth also remaining negative. Traded volumes were also little changed.
Although the market conditions are now approaching oversold after its successive days of pullback, selling activity could prolong as there are few signs of foreign funds ending their profit taking streak due to uncertain outlook of China’s economy that could also keep Malaysia’s economic and corporate performances in check.
In addition, the likelihood of US interest rates remaining elevated for longer could also weigh on Bursa Malaysia stocks despite the US Federal Reserve hinting that it may trim the rates later this year.
Nevertheless, the selling spree looks to be relatively mild as there are still bouts of support from local institutions to cushion the downside.
In the interim, the 1,528-1,530 levels are the immediate support, followed by the 1,520 level. The resistances, meanwhile, are at 1,537 and 1,545 points respectively.
Malacca Securities Research
The FBM KLCI traded lower for another session with profit taking among selected heavyweights.
In the US, Wall Street traded on a positive note as US Fed chairman Jerome Powell commented that the interest rates are at its peak and will need to have some confidence that inflation is heading towards 2% before cutting while the number of cuts may differ from earlier expectations of three times.
On the commodity markets, Brent crude trended within the US$82-US$/barrel zone after EIA data showed a smaller-than-expected increase in US weekly crude stocks.
Meanwhile, gold price charged towards a fresh intraday high of US$2,152/oz level in view of looser monetary policies. Besides, the FCPO (crude palm oil futures) also surged above the significant trendline and closed at RM4,071/metric tonne.
After forming a hammer candle on the FBM KLCI, the key index continued to trade lower for another session. The technical readings on the key index were negative with the MACD Histogram extending another negative bar while the RSI approaching 50.
The resistance is envisaged around 1,545-1,555 while the support is set at 1,515-1,520. – March 7, 2024
