BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI went nowhere yesterday, ending the day with minute gains amid a directionless trading environment with market players assessing impact of the fresh conflict in the Middle East.
For most of the day, the key index trended within a narrow range but was generally in the positive territory on mild bargain hunting.
However, conditions in the broader market were more subdued with quick profit taking on many of the lower liners, hence leaving market breadth decidedly negative.
The near-term outlook is likely to remain cautious, undermined by the new geopolitical concerns in the Middle East that is causing a flight to safety.
For now, however, much of the conflict is under control with market sentiments having not deteriorated significantly, thus providing hope that the key index could at least find some measure of near-term stability.
The rebound in many key overseas stock indices overnight could provide impetus for the FBM KLCI to find some near-term solace.
Nevertheless, the overall market conditions are still fragile due to concerns over impact of higher interest rates on the demand and employment prospect even as inflation has eased – a development which could keep the market conditions subdued for longer.
The supports remain at the 1,407-1,410 levels, followed by the new psychological level of 1,400 points. Meanwhile, the resistances are at 1,420 points and the 1,425 level.
Malacca Securities Research
Despite the rising concerns over the Middle East conflict, the FBM KLCI ended on a flattish tone while traders in the US stock markets were scooping up shares related to the oil and defence industries.
Also, we believe the market could be focusing on the economy and earnings season that will be starting this week with the banking heavyweights.
Given the strong rebound on Wall Street, buying interest may emerge on the local front with the focus on the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP) as well as the upcoming Budget 2024 this Friday (Oct 13).
Commodities-wise, Brent crude spiked more than 4% to stay above the US$88/barrel level amid rising geopolitical concerns while crude palm oil (CPO) prices are trading below the RM3,600/metric tonne level.
The FBM KLCI ended marginally higher, hovering above the support zone of 1,400-1,415. The technical readings on the key index were positive with the MACD Histogram forming a rounding bottom formation and the RSI hooked above 30.
The resistance is envisaged around 1,440-1,450 while the support is located around 1,400-1,415. – Oct 10, 2023
