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 retreated once again and slipping below the 200-day moving average line at the close of yesterday’s trade.
For the most part, market conditions were lacklustre due to the cautious sentiment among regional equity markets ahead of the US Federal Reserve’s interest rate decision as well as a still weak China manufacturing output.
The lower liners also retreated on the lack of positive leads with market breadth falling into the negative territory again. Market interest was also thinner.
With the US Fed leaving interest rates unchanged, there should be less pressure on Bank Negara Malaysia (BNM) to also raise rates which should provide some reprieve for stocks on Bursa Malaysia as well as the ringgit’s performance.
This should also help the key index to post a near-term revival and to regain the “make or break” line of 1,437 points.
A stay above this level would suggest that the uptrend on the FBM KLCI will be preserved, otherwise the key index will be in a state of flux again.
Apart from a possible climb back above the 1,437 level, the key index will attempt to also re-capture the 1,440 level that would also allow it to maintain its base building around the 1,430 and 1,450 level. The other support is at the 1,434 level.
Malacca Securities Research
The FBM KLCI turned lower following the softer PMI (Purchasing Managers’ Index) data in October despite sentiment across regional markets being more positive.
Meanwhile, the US stock markets gained further overnight as the US Fed kept the interest rate unchanged while the 10-year Treasury yield eased further.
Given the positive trading tone from Wall Street, buying interest may spill over towards stocks on the local front.
However, we expect softer trading activities ahead of the BNM’s Monetary Policy Committee (MPC) meeting whereby a monetary policy statement will be released by 3pm today to provide clues on the interest rate direction.
On the commodity markets, Brent crude prices reversed earlier gains from US$87/barrel to below US$85/barrel.
The FBM KLCI ended lower but this might be pending a flag formation breakout. The technical readings on the key index are negative with the MACD Histogram extending a positive bar only slightly off the zero level while the RSI has dipped below 50.
The resistance is pegged around 1,450-1,460 while the support is at 1,420-1,430. – Nov 2, 2023
