BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks mounted a rebound yesterday, breaking its downward streak as mild buying interest returned to provide some reprieve to the market and to stay above the 1,500 level.
The gains were also in tandem with the upsides in regional indices as they await for the US Federal Reserve’s interest rate decision.
Market breadth turned positive with many lower liners and broader market shares regaining ground, but market volumes continue to taper as many market players remained on the sidelines.
We see the key index attempting to find further near-term support around the 1,500-1,520 levels as it also looks to find some stability ahead of the Lunar New Year break.
However, there could be some renewed volatility following the Fed’s decision to allow interest rates to be raised as early as March to combat inflation.
The rates lift-off could also mark the start of an interest rate upcycle as well as signal the end of tapering.
Despite the possible market gyrations, the key index is expected to remain largely steadfast amid the bouts of buying support that would keep it above the psychological 1,500 level.
In the interim, there is support at the 1,508 level while the resistances above the 1,520 level is at 1,528 points.
Malacca Securities Research
The FBM KLCI rebounded, fuelled by bargain hunting activities which emerged after seven sessions of losses.
However, we believe profit taking activities might emerge in the local bourse, taking cue from the softer performances on Wall Street following the Fed’s confirmation on the upcoming rate hikes direction and continuous bond tapering moving forward.
On a side note, the Festive Season Maximum Price Control Scheme (SHMMP) for the Chinese New Year may impact the poultry and consumer-related sectors.
Commodities-wise, both crude palm oil (CPO) and crude oil prices rose with the latter closing just slightly below the US$90/barrel mark.
The FBM KLCI snapped seven sessions of losses to close higher. Currently, the FBM KLCI is hovering below the SMA50 level. Technical indicators remained negative as the MACD Histogram has extended a negative bar while the RSI continued to hover below 50.
Key support will be at 1,500-1,505 while the resistances will be pegged around 1,530-1,570. – Jan 27, 2022
