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 continues to consolidate after its recent strong recovery and its failure overcome the psychological 1,650 level.
However, the pullback was relatively mild with bouts of support shoring up the key index.
Once again, utilities stocks were the biggest losers but was cushioned somewhat by other gainers on the key index. The broader market was mixed with losers just ahead of gainers for the day.
The lack of leads also saw traded volumes slipping some 22% to just 3.3 billion shares.
After a brief consolidation spell, the FBM KLCI may resume its uptrend after the US Federal Reserve hinted overnight that an interest rate cut could be in the offing as early as next month.
This helped to shore up US equities as well that is likely to also permeate to Malaysian equities in the day ahead.
As it is, the interest rate cut is widely expected to provide a booster to equity markets as they were seen to be held up for too long that also hindered the on-going economic recovery amid easing inflationary pressure.
With sentiments improving from the potential Fed move, the key index could again look to retest the immediate resistance at the 1,640 level before making a pass at the psychological 1,650 level. The supports, on the other hand, are at 1,631 points and at 1,625 points respectively.
Malacca Securities Research
The local stock exchange ended on a mixed note as we head into a busy corporate earnings season.
Profit-taking activities remained prevalent in line with the regional markets’ performance. In the US, non-farm payroll saw a significant downward revision of 818,000, the largest since 2009.
However, market sentiment remained positive as the Fed minutes suggested a potential rate cut of at least 25 basis points in the upcoming Federal Open Market Committee (FOMC) meeting.
Traders will continue to monitor key economic data, including unemployment claims, Flash Manufacturing PMI and the Jackson Hole symposium on Friday.
In the commodity markets, Brent crude declined further due to the payroll revision and softer demand from China while gold price held above US$2,500/oz. Elsewhere, CPO (crude palm oil) prices mildly rebounded, trading above RM3,700/metric tonne.
The FBM KLCI index ended lower towards the 1,635 level. However, the technical readings on the key index were still positive with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,650-1,655 while the support is set at 1,620-1,615. – Aug 22, 2024
