BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malaysian stocks continue to lose ground at the start of the week with the key index ending the day near the 1,440 support.
Market conditions were subdued by the increased selling by foreign funds ahead of the end of the quarter with most heavyweights still succumbing to profit taking that started last week.
The lower liners were also in the red amid the weaker sentiments which resulted in market breadth turning negative again.
We now see the key index attempting to find support at the 1,440 level as it looks to stem its recent pullback.
The overnight gains in key global indices could provide some stability to the local equity market conditions and may prompt the FBM KLCI to mount a rebound as well as to undergo window dressing activities ahead of the end of 3Q 2023.
However, with the market still dithering due to the lack of sustainable leads, any recovery could be modest for the time being with the key index just angling a return to the 1,450 level and continue with its base building.
Under the prevailing environment, upsides could be gradual with the immediate target set at 1,445 points before the psychological 1,450 level is re-tested. Apart from the 1,440 support, the others are at 1,438 and 1,433 points respectively.
Malacca Securities Research
The FBM KLCI ended lower in tandem with the negative performance from the overnight US stock markets coupled with heavier profit taking activities within the index heavyweights.
Despite Wall Street having snapped its four-day losing streak, we believe traders may remain cautious ahead of the release of the (i) US GDP data (Sept 28); (ii) US Federal Reserve chairman Jerome Powell’s speech (Sept 29); (iii) US Core PCE (Personal Consumption Expenditures) data (Sept 29) as well as (iv) China PMI (Purchasing Managers Index) data.
Nevertheless, the downside risk should be limited on our local front with the focus on the upcoming Budget 2024.
Commodities-wise, Brent crude has continued to trade around the US$93/barrel level while crude palm oil (CPO) prices remained below the RM3,700/metric tonne level.
The FBM KLCI ended lower, falling below the 1,450 psychological level. Also, the technical readings on the key index were negative with the MACD Histogram forming the second negative bar while the RSI dropped below 50.
The resistance is located around 1,465-1,470 while the support is envisaged around 1,430-1,440. – Sept 26, 2023