BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
After an extended overbought run, the FBM KLCI retreated on Tuesday as profit taking sets in on some of recent big gainers.
However, profit taking activity was mild with the key index staying above the 1,620 level at the close. Most Bursa sector indices also ended the day lower which resulted in market breadth turning negative.
On the broader market, the plantation index was the biggest loser as the total market volume dipped by some 23% from a day earlier.
We think the consolidation trend is likely to continue over the near-term as the toppish conditions remains alongside the prospects of higher-for-longer interest rate environment.
At the same time, there are also fewer positive leads after the recent gains have largely accounted for the country’s better-than-expected 1Q 2024 GDP performance.
Market players are now awaiting more corporate results to be released over the coming two weeks to assess their prospects ahead.
The pullback is also seen as healthy for some of the recent gains to be digested that could also allow the key index to build-up a base around the 1,600-1,620 levels before potentially springing higher later.
As such, the 1,620 level is also serving as the immediate support, followed by the 1,610 level. On the other hand, the resistances are pegged at 1,630 and 1,640 points respectively.
Malacca Securities Research
Profit taking activity gained momentum after the FBM KLCI hit the above 1,620 level, prompting the benchmark index to snapped a three-day winning streak.
Meanwhile, the overall market sentiment in the US turned negative after the US Federal Reserve meeting minutes indicated that inflationary pressure remained sticky and the market is pricing in prospect of the US Fed staying hawkish over the near term.
NVIDIA which released its 1Q 2025 results whereby the tech giant has beaten analysts’ expectations went on to hit above US$1,000 during post-market trading.
On the commodity markets, Brent crude traded lower after the US Fed’s minutes while gold price pulled back below the US$2,400/oz zone. Meanwhile, crude palm oil (CPO) trended on a volatile move and closed below the RM3,900/metric tonne level.
The FBM KLCI index ended higher, surpassing the 1,625 level. However, the technical readings on the key index were mixed with the MACD Histogram turned positive while the RSI is overbought.
The resistance is envisaged around 1,640-1,645 while the support is set at 1,600-1,605. – May 23, 2024
