BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The losing streak on Bursa Malaysia persisted at the end of last week with the key index surrendering its morning’s gains to end the day below the psychological 1,600 level.
The selling was again pronounced with market breadth decidedly negative with total losers more than twice the number of gaining stocks.
The brisk selling saw traded volumes nearly topping 7 billion shares with foreign funds the net sellers as they locked-in their profits from the recent upsides.
With the key index slipping below the 1,600 level, market conditions have become more precarious as a major support has given way that may leave the key index to weaken further.
The end of the results reporting season is also seeing fewer available leads with market players monitoring the likelihood of interest rate cuts in the US that could allow for the FBM KLCI to mount a rebound after its recent pullback.
In the meantime, the recent selling spree is also leaving conditions near oversold and a rebound is due.
The bounce among key global indices overnight could provide some impetus for stocks on Bursa Malaysia to mount a recovery at the start of the week. Such recovery could possibly see the key index re-test the 1,600 level over the near[1]term.
Thereafter, the next resistance is at 1,609 points while the supports are at 1,595 and 1,590 points respectively.
Malacca Securities Research
The FBM KLCI ended lower for the week below the 1,600 psychological level as profit taking activities emerged after digesting most of the corporate earnings.
Meanwhile, the US stock markets closed mixed for the session amid soft manufacturing sector data given the ISM Manufacturing PMI came in below expectations.
However, we think Nvidia’s projections are still intact given its CEO Jensen Huang having revealed that the company’s next-generation AI (artificial intelligence) chip platform will be rolling out in 2026.
On the commodity markets, Brent crude violated below US$80/barrel as OPEC+ plans to return output after 3Q 2024. Meanwhile, CPO (crude palm oil) price has charged higher above the RM4,050/metric tonne level on the back of stronger demand coming from key buyer China due to its low inventories level.
The FBM KLCI index ended lower for the sixth session, dipping below the 1,600 level. The technical readings on the key index were negative with the MACD Histogram extending another negative bar while the RSI dropped below 50.
The resistance is envisaged around 1,610-1,615 while the support is set at 1,575-1,580. – June 4, 2024
