BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Stocks lost further ground yesterday as profit taking activities escalated amid a more subdued market environment, prompting more selling activities, particularly after a tech stock rout on Wall Street.
As a result, market breadth was decidedly negative with losing stocks overwhelming gaining ones by a near 3-to-1 ratio.
Lower liners also stumbled amid the increased selling pressure with traded volumes a tad lower than the day before.
Near-term market conditions are likely to stay subdued due to lingering uncertainties over the direction of the global economy and further monetary easing prospects.
There are also few domestic leads for market players to follow and this could still see further unwinding of last years’ window dressing activities in the day ahead.
Although the downside bias still looms large, we do not rule out a quick rebound after yesterday’s selling that may prompt some bargain hunting.
Nevertheless, any rebound is likely to be mild and may only lift the key index back to the 1,620 level. The ensuing hurdle is at 1,627 points while the immediate support is pegged at the 1,609 level which is the 200-day moving average line, followed by 1,603 points.
Malacca Securities Research
The local front closed on a negative tone as subdued overnight performance in the US spilled into the regional markets.
Meanwhile, Wall Street ended mixed with FOMC (Federal Open Market Committee) meeting minutes reflecting that nearly all committee participants found that upside risks to the inflation outlook had increased alongside with expectations of fewer rate cuts this year than previously anticipated.
Traders will also closely monitor the US monthly initial jobless claims data and China’s CPI (Consumer Price Index) and PPI (Producer Price Index) later today.
In the commodities market, Brent crude declined by trading around US$76-US$77/barrel while gold price ranged along US$2,660/oz with a positive bias. Meanwhile, CPO (crude palm oil) prices continued to trade below the RM4,400/metric tonne mark.
While the FBM KLCI is trading above the moving average lines, the indicators are starting to show negative readings. The MACD has formed its first negative histogram while RSI reading is below 50, indicating negative momentum seen at the current juncture.
Resistance is anticipated around 1,629-1,634 while support is set at 1,594-1,599. – Jan 9, 2025
