BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities continue to make headway to climb above the 1,630 level at the close amid increasing interest on some of the beaten down sector leaders by local and foreign institutional investors following the confirmation of Donald Trump’s win in the US presidential election.
Lower liners also gained further ground, particularly technology-related stocks that pushed the technology sector higher by 6.2%.
Gainers trounced losers by more than a 2-to-1 margin as market interest also improved with volumes nearly a third higher than the day before.
We see near-term market conditions staying relatively buoyant as a Trump presidency is likely to be more pro-business albeit the trade war with China may escalate due to his protectionist policies.
Nevertheless, the FBM KLCI is set to follow Wall Street’s lead in heading higher over the near-term amid the on-going equity market euphoria that could allow it to extend its recovery after it found support at the 1,600 points recently.
The US Federal Reserve is also widely tipped to reduce interest rates again with potentially another 25bps cut later today that could also provide further impetus for equity markets to head higher.
With the recovery looking to extend, the next targets are at 1,640 points and 1,645 points respectively. On the downside, the supports are at 1,630 points and at 1,624 points respectively.
Malacca Securities Research
The FBM KLCI rebounded as the market responded positively to Donald Trump’s win in the race for the 47th US president.
Similarly, Wall Street gained momentum as traders digested Trump’s return to the White House and the Republicans’ victory in the US Senate.
We believe that most US corporations will be early beneficiaries given the anticipation of a lower tax environment under Trump’s administration.
Also, the market will closely monitor tonight’s Federal Open Market Committee (FOMC) meeting which could trigger a spike in the VIX (CBOE Volatility Index).
In the commodities market, Brent crude traded flat around US$75/barrel. Meanwhile, gold prices saw a significant pullback, trading at US$2,664/oz as investors reduced exposure to safe-haven assets amid a surge in the US dollar index.
At the same time, CPO (crude palm oil) prices continued their rally, closing above the RM4,900/metric tonne level.
The FBM KLCI index closed higher towards the 1,634 level. The technical readings on the key index were positive, with the MACD histogram formed positive bars and the RSI hooked above 50.
The resistance is envisaged around 1,649-1,654 while the support is set at 1,614-1,619. – Nov 7, 2024
