BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks pulled-back yesterday following the regional trend ahead of the US Federal Reserve’s interest rate decision later in the day.
This saw mild profit taking emerging on some of the recent movers but the key index managed to hold on to the 1,660-point support level at the close.
In the broader market, conditions were mixed with total losers inching ahead of gainers as traded volumes also whittled down to just 2.3 billion shares.
With the Fed confirming a 50 bp interest rate cut, this should be beneficial to the Malaysian economy over the medium term as the Fed also reiterated its view that the US economy is unlikely to face a recession.
Moreover, inflation should also be under control, hence opening the door for further interest rate cuts later in the year.
This optimism should help to buoy stocks on Bursa Malaysia and allow the key index to sustain its rebound amid the prognosis of improving economic and corporate earnings outlook.
With this, we expect the key index to make further headway and re-challenge the 1,670 resistances. Further above, the hurdles are at 1,677 and 1,684 points respectively.
On the downside, meanwhile, the supports are pegged at 1,655 points and the psychological 1,650 points respectively.
Malacca Securities Research
The FBM KLCI traded lower as investors remained cautious ahead of the Fed’s FOMC (Federal Open Market Committee) meeting. Sentiment was also dampened by selling pressure on YTL and PCHEM.
In the US, Wall Street closed lower after the Fed reduced interest rates by 0.5%. We believe this could raise concerns about a potential recession or at the very least, suggest that the Fed anticipates weaker economic data ahead, hence prompting such a large rate cut.
In the commodities market, Brent crude snapped a two-day rally following the Fed’s rate cut amid rising concerns over demand from China. Gold prices approached US$2,600/oz before retreating to US$2,,555/oz due to profit-taking.
Meanwhile, crude palm oil (CPO) rebounded on the back of better-than-expected export data.
The FBM KLCI index closed lower towards the 1,660 level. However, the technical readings on the key index were mixed with the MACD histogram forming another negative bar but the RSI hooked above 50.
The resistance is envisaged around 1,675-1,680 while the support is set at 1,640-1,645. – Sept 19, 2024
