BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The FBM KLCI extended its gains for a sixth session to start the week, riding on the continuing optimism over the direction of Malaysian equities in 2024.
In the process, the key index also took out successive resistance levels to end the day firmly above the 1,500 psychological level.
Nevertheless, the broader market was more subdued with mild profit taking emerging to send both the FBM ACE and FBM Small Cap indices lower. Market breadth was also negative on reduced market following.
The sustained buying on the heavyweights albeit selectively will continue to provide the near-term impetus for the FBM KLCI to make further headway, putting behind it the market vagaries that dented its performance in 2023.
Much of the buying will continue to be sentiment driven as there remains little improvements to Bursa Malaysia’s fundamentals for the time being, thus allowing the FBM KLCI to outperform its ASEAN peers thus far in 2024.
It also allows the key index to play catch up from its laggard position over the past two years with the prospects of further improvement in the country’s economic outlook later this year.
Nevertheless, conditions are approaching overbought after the recent gains and a slowdown on the cards as the recent gains are digested. This could keep further near-term gains more modest with the hurdles now at the 1,520-1,525 levels while the supports are at the 1,508-1,510 levels and at 1,500 points respectively.
Malacca Securities Research
The FBM KLCI closed above the 1,500 psychological level with high conviction price action, thus continuing its winning streak for the sixth session led by the banking heavyweights.
Also, the US stock markets marched stronger for the session ahead of the Federal Open Market Committee (FOMC) meeting as well as earnings releases from tech giants this week.
However, as the Hong Kong court orders liquidation of China’s Evergrande Group, we believe this may cause the overall sentiment to turn negative at least for the near term, translating to potential profit taking mode on the local front.
On the commodity markets, Brent crude maintained above the US$80/barrel amid the ongoing tension in the Middle East region but the upside was capped due to the liquidation order of Evergrande.
The FBM KLCI ended higher for the sixth consecutive session. The technical readings on the key index were positive with the MACD Histogram extending another positive bar while the RSI maintains above the 50 level.
The resistance is envisaged around 1,520-1,530 while the support is set at 1,490-1,480. – Jan 30, 2024