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 mounted a strong comeback yesterday, jumping past the 1,610 level to settle at the 1,615 level amid the return of buying interest on many key index stocks.
The surge were also in tandem with gains in regional indices that reacted positively to the US Federal Reserve reiterating its plan to reduce interest rates later in the year.
Lower liners were also pushed higher with total gainers outpacing losers nearly on a 3-to-1 ratio. However, traded volumes were just mildly higher.
Yesterday’s strong upsides was a surprise as fresh buying interest momentum was just recovering that allowed the key index to push past several resistance levels.
The key index could now be looking to build upon its recent gains but the upsides could be more moderate after yesterday’s big moves.
There also remains few impetuses and yesterday’s buying could just be some portfolio realignment by foreign funds for 2H 2024.
Therefore, follow-through buying interest will be vital to sustain the rally, otherwise there could be increased tentativeness as quick profit taking activities cannot be ruled out.
On the upside, the hurdles are at the 1,620 level and 1,624 levels while the 1,610 level is the immediate support. Thereafter, the psychological 1,600 level will be the next support.
Malacca Securities Research
The FBM KLCI charged higher after a decent consolidation below the 1,600-point level last week while the FBM70 marched towards a 52-week high led by the construction sector.
Over in the US, both the S&P500 and Nasdaq – led by technology heavyweights – ended in the all-time high zone as private-sector employment came in below expectation following which the market could be pricing in earlier rate cuts by the Fed this year.
Meanwhile, the FOMC (Federal Open Market Committee) meeting minutes still provide the same narrative on inflation direction and data dependent monetary policies going forward.
On the commodity markets, Brent crude traded above US$87/barrel while gold price gained momentum above US$2,350/oz having priced in the softer US dollar. Elsewhere, crude palm oil (CPO) rose nearer to RM4,100/metric tonne.
The FBM KLCI index ended higher towards the 1,615 level, firmly above the significant 1,600 psychological level. The technical readings on the key index were positive with the MACD histogram forming positive bars and the RSI surged above 50.
The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. – July 4, 2024
