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 firm rebound yesterday, recapturing the 1,625 level on the return of bargain hunting activities and some month-end window dressing activity.
The recovery was also in line with the upbeat note among regional indices after Japan raised interest rates for the first time since 2008.
Financial stocks emerged as the day’s biggest gainers but the broader market was mixed-to-lower leaving market breadth to stay on the negative side.
Market conditions could stay positive after the US Federal Reserve chairman provided the strongest hint yet on an interest rate cut in September which could continue to bolster the near-term market sentiments.
As a result, there should be further near-term upsides among FBM KLCI constituents as market players could also buy into the higher probability of interest rate cut which is widely seen as a panacea for a pick-up in global demand and bolster Malaysian exports in due course.
The sustained upsides could see the key index target the next hurdles at 1,631 points before making a pass at the 1,637-1,638 resistance levels which are also its recent highs. On the downside, the immediate support is at 1,620 points, followed by the 1,617 points respectively.
Malacca Securities Research
Another volatile move for the local market saw the FBM KLCI and FBM Small Cap rebounding while the FBM70 declined for the session.
The financial sector was the leader while the technology segment lagged.
Meanwhile, US stocks traded higher after the two-day FOMC (Federal Open Market Committee) meeting concluded with the Fed keeping rates unchanged.
Earnings from META and AMD were better than expected, pushing up related technology heavyweights. Additionally, the market is pricing in interest rate cuts in September 2024 and December 2024 in light of the Fed’s statements during the FOMC meeting.
In the commodity markets, Brent crude jumped significantly due to heightened geopolitical risk and further declines in US inventories while gold price rallied further to the US$2,440/oz zone. Elsewhere, CPO (crude palm oil) price still range-bound along RM3,900/metric tonne.
The FBM KLCI index ended higher towards 1,625 level. However, the technical readings on the key index were mixed with the formation of another negative MACD histogram but the RSI surged above 50.
The resistance is envisaged around 1,640-1,645 while the support is set at 1,605-1,610. – Aug 1, 2024
