BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities took a dive yesterday as the heightened geopolitical concerns in the Middle East caused a flight to safety with market players reducing their exposure to equities, thus prompting a more pronounced profit taking.
The sell-off on the key index was steep, sending it to its lowest level in more than a month.
The selling was also widespread with most lower liners ending the day in the red with losers continuing to dominate gainers by a wide margin. The selling volumes also rose by some 50%.
We see near-term market conditions remaining unsettled amid the rising geopolitical concerns that will continue to keep market sentiments wary. Much of Bursa Malaysia’s immediate trading direction will be dictated by the fluid developments in the Middle East.
Nevertheless, there appears to be some measure of calmness overnight which could enable global equities to find some stability as well.
The new-found calmness could permeate to the FBM KLCI and help it to find support around the 1,640 level with hopes for a quick turnaround rising even as there is lingering tentativeness.
Mild bargain hunting may emerge on some of the beaten down sector leaders that may haul the key index back above the 1,640 level to possibly retest the 1,647-1,650 levels.
Beyond that, the next resistance is at 1,657 while the supports are at the 1,630-1,633 levels and at 1,625 points respectively
Malacca Securities Research
Amid rising tensions in the Middle East, the local stock exchange was negatively affected with the FBM KLCI dropping more than 1%.
Meanwhile, attention remained on China and Hong Kong markets as Beijing rolled out several stimulus packages to boost the economy and stock markets.
In the US, Wall Street managed to eke out marginal gains with the ADP non-farm employment data coming in better than expected.
However, the upside was minimal as market participants traded cautiously ahead of September’s payroll data.
In the commodities market, Brent crude remained firm, trading above US$74/barrel due to the Middle East tension but upside was limited due to larger-than-expected build up in US oil inventories. Gold prices traded along US$2,660/oz while CPO (crude palm oil) prices stabilised around RM4,180/metric tonne.
The FBM KLCI index closed lower around the 1,639 level. Also, technical readings on the key index were negative with the MACD histogram having formed another negative bar but the RSI trended below 50.
The resistance is envisaged around 1,654-1,659 while the support is set at 1,619-1,624. – Oct 3, 2024
