BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
After a slow start to the day, the FBM KLCI roared back in the later session to gain 13 points to end the day above the 1,600 psychological level, driven by strong buying momentum in selected index heavyweights as they continue to recover from January’s sell-off.
The broader market, however, were more subdued as profit taking was still unfolding that left many of these stocks on the losing end. As a result, market breadth remained negative even as market interest improved further.
With the key index still on a purple patch, there could be more near-term upsides as bargain hunting may still be in the offing that will help to sustain the market’s upsides.
As it is, foreign institutional funds are turning net buyers of late which not only stopped the rot on Bursa Malaysia but is also providing the impetus for the key index to sustain its recovery.
This development bucks the uncertainties surrounding the global economic environment and the direction of interest rates.
Although the FBM KLCI’s climb back above the 1,600 level is encouraging and further upsides beckons, the gains could be slower after the recent gains may prompt mild profit taking ahead.
This could see the key index attempting to fortify its base around the 1,600 level with the immediate hurdle set at around the 1,610 level, followed by the 1,613-1,615 levels. Apart from the 1,600 support, the other support is at 1,595 points.
Malacca Securities Research
The FBM KLCI (+0.82%) rebounded from Monday’s losses, driven by gains in banking heavyweights following the February MSCI review.
Meanwhile, Wall Street closed mostly lower after the hotter-than-anticipated CPI (Consumer Price Index) data which tempered the US Federal Reserve’s plans for an easing interest rate cycle.
However, we believe the market may be brushing off the CPI data for now, shifting its focus to several corporate earnings that will be releasing this week.
Also, traders will monitor several key economic data, including (i) Core PPI (Producer Price Index); and (ii) PPI for further clues on the rate cuts path.
In the commodities market, oil dropped below US$75/barrel after a survey revealed a significant rise in US inventories last week. Gold prices surged above US$2,903/oz following the inflation data while CPO (crude palm oil) prices closed above RM4,600/metric tonne.
The key index surpassed its EMA20 with technical indicators showing positive signs with the MACD Histogram expanded positively on the positive territory while the RSI is trending above the 50 level.
Resistance is anticipated around 1,618-1,623 while support is set at 1,583-1,588. – Feb 13, 2025
