BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks underwent a mild consolidation at the start of the week, breaking a two-day rally but the pullback was relatively measured as mild buying support helped to hold up the key index at the 1,665-support level.
The profit taking also extended to the broader market that also halted their rebound. As a result, market breadth became negative with construction stocks the big losers. Traded volumes also slipped some 20% from last Friday.
Despite yesterday’s pullback, the market’s undertone remains firm on the continuing positivity from the US Federal Reserve’s interest rate cut that would still provide the catalyst for equities to head higher.
The Fed’s move has given Malaysian equities another leg up on the increased prospects for demand driven gains in due course albeit the benefits will take time to materialise.
This could allow for the FBM KLCI to mount a quick rebound, in tune with the gains on Wall Street overnight.
However, the upsides may be limited for the time being given that much of the market’s positivity are already reflected in the key index’s strong YTD (year-to-date) gains.
Therefore, the key index may target the 1,670 level for now before making a pass at the 1,675 level. The supports, on the other hand, are at 1,660 and 1,655 levels respectively.
Malacca Securities Research
Bursa Malaysia started the week on a negative note as profit-taking emerged following Friday’s rebalancing activities.
Meanwhile, US stock markets traded higher (Dow and S&P500 charged to new all-time highs), boosted by remarks from several Fed policymakers who suggested that the recent 50 bps rate cut was timely with further dovish measures potentially coming within the next three months.
In economic data, the US manufacturing PMI indicated contraction while the services PMI remained above 50, signalling growth.
In the commodities market, Brent oil fell below US$74/barrel due to weaker demand from China and a surprise slowdown in European manufacturing which dampened market sentiment.
Meanwhile, gold prices stayed above US$2,600/oz while crude palm oil (CPO) surged to an 11-week high.
The FBM KLCI index closed towards the 1,665 level. However, technical readings on the key index were positive with the MACD histogram turned into the positive territory and the RSI stayed above 50.
The resistance is envisaged around 1,680-1,685 while the support is set at 1,645-1,650. – Sept 24, 2024
