What to expect on Bursa Malaysia this Thursday

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 in a consolidation mode yesterday, slipping below the 1,610 level at the close after it surrendered its intraday gains in the afternoon session ahead of the US Federal Reserve’s interest rate decision.

Similarly, the lower liners also ended their upward streak as profit taking emerged among the recent big movers that left market breadth on the negative side.

However, traded volumes continue to forge ahead, rising to 7.6 billion shares for the day.

We still see near term market conditions staying unsettled as the expectations for US interest rate cuts have been tempered amid a still high inflation reading, prompting the Fed to suggest that it may only trim interest rate once and later in the year.

Furthermore, domestic leads are also largely absent and this could still leave stocks to dither for longer.

Under the prevailing environment, market players may still opt to stay on the sidelines for now, continuing to assess the prospects of the index-linked constituents after their strong YTD (year-to-date) rally.

This also means that the rangebound trend is likely to prevail with the key index to linger within the 1,600 and 1,620 levels for the time being. There is an interim support at the 1,605 level while the resistances are at the 1,610 and 1,615 levels respectively.

Malacca Securities Research

Again, the FBM KLCI closed in the negative territory but FBM 70 charged higher while the FBM Small Cap saw some profit taking activities.

Over in the US, Wall Street closed relatively positive with Nasdaq registering its record highs supported by cooler-than-expected CPI (consumer price index) and core CPI numbers.

Even though the US Fed kept the interest rate unchanged and is looking at one rate cut in 2024, the market is expecting more rate cuts this year due to declining inflationary numbers.

On the commodity markets, Brent crude is traded back into the US$81-US$84/metric tonne zone which is healthy for oil producers while gold price is forming a bear flag formation after the Federal Open Market Committee (FOMC) meeting. Meanwhile, CPO (crude palm oil) price continues to stay within a tight range between RM3,900-RM4,000/metric tonne.

The FBM KLCI index dipped below the 1,610 level. The technical readings on the key index were mildly positive with the MACD Histogram hovering around the 0 level while the RSI maintains above 50.

The resistance is envisaged around 1,625-1,630 while the support is set at 1,590-1,595. – June 13, 2024

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