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 posted strong gains again yesterday, boosted by firm buying interest on selected banking stocks, particularly from foreign institutions that continue to be net buyers of Malaysian equities.
This follows the spate of better-than-expected results from some banks but the broader market remains subdued due to the continuing lack of buying interest, particularly from retail players.
As a result, market breadth stayed negative as the FBM Small Cap and FBM ACE indices lost further ground.
Although the FBM KLCI’s upsides over the past few sessions were welcomed, it was largely due to buying on selective index-linked stocks.
Without the broad-based buying, the longevity of the uptrend could be difficult to sustain as the gains have also left the key index increasingly toppish with its valuations already above its historical average.
As such, we still view the on-going upside as overdone with a pullback being imminent for some of the recent gains to be absorbed which could also be healthy for the key index to take a breather as the market’s undertone remains positive for now.
On the upside, the 1,685 level is the next formidable hurdle for the key index to pass. Thereafter, the resistances are at 1,695 and 1,700 points respectively. The immediate support is pegged at the 1,653-1,657 levels, followed by 1,645 point.
Malacca Securities Research
The local stock exchange saw mixed activity with buying interest concentrated on blue chips and the banking sector while investors offloaded small-cap shares, leading to negative market breadth.
Despite NVIDIA’s better-than-expected results, Wall Steet traded lower in post-market sessions, suggesting that the AI (artificial intelligence)-driven rally may be reaching lofty valuations and could face exhaustion in the near term.
Key economic data releases this week include (i) preliminary US GDP (Thursday), (ii) unemployment claims (Thursday), and (iii) core PCE (Personal Consumption Expenditures Price Index) data (Friday).
In the commodity market, Brent crude declined for the second session due to a smaller-than-expected drop in US inventories last week while gold prices remained above US$2,500/oz. Elsewhere, CPO (crude palm oil) prices hovered just below RM3,900/metric tonne.
The FBM KLCI index ended higher towards the 1,675 level. The technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,690-1,695 while the support is set at 1,660-1,655. – Aug 29, 2024
