BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI lost ground again yesterday by having ended the day at the 1,580-support level after trending within a tight range.
Market sentiments remained affected by lingering tariff concerns after President Trump reiterated its plans to impose 25% tariffs on automobile, semiconductor and pharmaceutical imports.
The lower liners were a sea of red with glove stocks tumbling again on weak earnings prospects, thus leaving total losers to overwhelm gainers by a wide margin.
We continue to think that the broad market conditions are likely to remain unsettled due to prevailing concerns over the trade restrictions by the US on its major trading partners that could also affect Malaysia’s export performance, particularly on the AI (artificial intelligence) sector.
As a result, the mixed-to-lower conditions are likely to prevail for now, bucking the mostly firm key global equity markets as the selling pressure remains.
Despite the weakness, there may be mild buying support on some of the sector leaders that could keep the key index close to the 1,580 level for the time being with the immediate support set at between the 1,570 and 1,575 points level.
On the upside, the resistances are at around the 1,582-1,585 levels, followed by the 1,590 level.
Malacca Securities Research
The local bourse reversed its one-day gains due to renewed selling pressure in banking and consumer heavyweights.
On the contrary, Wall Street continued its upward trajectory with the S&P 500 reaching a record high for the second consecutive day.
Investors appeared to look past President Trump’s tariff threats and the US Federal Reserve’s decision to pause rate cuts.
This is given that the Federal Open Market Committee (FOMC) meeting notes confirmed that interest rates are likely to remain unchanged for an extended period until clearer evidence shows inflation aligning with the 2% target.
Investors will monitor (i) initial jobless claims; (ii) crude oil inventories; and (iii) the S&P Global Services PMI (Purchasing Managers’ Index) this week.
In the commodities market, Brent crude remains above US$75/barrel, gold prices stayed near its all-time high while crude palm oil (CPO) prices surged above the RM4,600/metric tonne level.
The key index continues to hover below the significant EMAs with technical indicators turning weaker. Both the MACD Histogram and RSI are pointing downward.
Resistance is anticipated around 1,595-1,600 while support is set at 1,560-1,565. – Feb 20, 2025
