BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities ended 3Q 2024 on a whimper as profit taking continues to take hold following a strong YTD (year-to-date) performance.
Much of the downsides continue to be from the selling on banking and energy stocks that resulted in the FBM KLCI ending the quarter below the psychological 1,650 level.
In the broader market, conditions were mixed but selling still dominated trades as market breadth was negative. Traded volumes, meanwhile, rose more than a third as the selling spree remained.
With fresh buying interest abating, the near-term outlook is likely to stay subdued with the insipid trend likely to prevail for longer.
Overall conditions are also tentative with the lack of fresh leads seeing more profit taking as market players opt to lock in some their YTD gains instead.
In the absence of many market pointers, the profit taking spell looks to continue into the start of the quarter albeit we do not rule out the emergence of buying support later in the day that could help to shore up the FBM KLCI back close to the 1,650 level.
In the meantime, the key index’s immediate support is now at 1,647 points, followed by the 1,640-1,642 levels. Above the 1,650 level, the resistances are at 1,655 points and 1,660 points respectively.
Malacca Securities Research
Despite positive sentiment in China and Hong Kong, local stocks faced pressure with selling interest building across the board.
Meanwhile, the US rally persisted as the Dow and S&P 500 reached new highs. Traders reacted to remarks from the US Federal Reserve chairman Jerome Powell who indicated that if the economy evolves as expected, monetary policy will gradually shift towards a more neutral stance.
The probability of a 25-basis-point rate cut by the FOMC (Federal Open Market Committee) in November jumped to 64%, up from 47% last Friday.
Key upcoming events that traders will be closely monitoring include the ISM Manufacturing PMI, non-farm payrolls and unemployment claims.
In the commodities market, Brent crude oil traded below US$72/barrel given OPEC+ plans to increase oil production. Meanwhile, gold prices hovered near the US$2,630/oz mark while CPO (crude palm oil) prices – although retracing – remained above the significant RM4,000 level.
The FBM KLCI index closed lower towards the 1,648 level. Additionally, the technical readings on the key index were negative with the MACD histogram turned into negative territory and the RSI trended below 50.
The resistance is envisaged around 1,663-1,668 while the support is set at 1,628-1,633. – Oct 1, 2024
