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 retreated further as market conditions turned more cautious as there were fewer leads to encourage fresh buying.
Malaysian equities’ performance also mirrored the largely insipid conditions among regional indices that also saw fewer compelling leads.
Consequently, the key index slid below the 1,610 level at the close with the lower liners also following suit as the profit taking activities persisted. Losers beat gainers on a 2-to-1 margin with volumes also slipping below 5 billion shares.
With fewer catalysts as the results reporting season comes to an end, market conditions are likely to stay morbid over the near-term with the selling/profit taking activities to continue dominating the key index’s near-term trend.
Leads from overseas markets are also thinning and as there are still few inklings of a reversal in the market trend, the downward streak remains intact for now with market players likely to continue locking in profits from the FBM KLCI’s strong uptrend since the start of the year.
With successive supports also breached, the key index could now look to the 1,600 level as the main support – an area where it could start to find some measure of stability. However, it the level also gives way, the next support is lowered to the 1,595 level. On the other hand, the resistances are at 1,610 and 1,615 points respectively.
Malacca Securities Research
The FBM KLCI continued to pullback for the fourth session as profit taking activities were observed within telecommunication heavyweights.
Similarly, the US stock markets ended lower amid rising US Treasury yield and concerns over the timing and scale of the potential interest rate cuts by the US Federal Reserve.
Thus, we believe the selling pressure may spillover towards stocks on the local front. Meanwhile, traders will be watching the key data such as the (i) US GDP (GDP (gross domestic product); and (ii) core PCE (Personal Consumption Expenditures Price) index this week whereby this will potentially dictate the Fed’s interest rate directions going forward.
On the commodity markets, Brent crude still traded within the range between US$83-US$84/barrel ahead of the OPEC+ meeting this weekend. Meanwhile, CPO (crude palm oil) price has surged above the RM4,000/metric tonne level as higher exports are expected amid low inventory levels in China.
The FBM KLCI index ended lower for the fourth session, retracing to the 1,605 level. The technical readings on the key index were mixed with the MACD Histogram extending another negative bar while the RSI maintains above 50.
The resistance is envisaged around 1,620-1,625 and the support is set at 1,585-1,590. – May 30,2024
