BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malaysian stocks retreated yesterday on profit taking, particularly from foreign funds and due to weakness in regional indices as well as the few pointers from the recently announced Budget 2024.
The weakness was also widespread with many lower liners and broader market shares also retreating, leaving losing stocks to overwhelm gaining ones on a ratio of nearly 2-to-1. Traded volumes were also largely unchanged at just a shade above the 3.0 billion shares mark.
With few impetuses from Budget 2024, Malaysian equities are devoid of noteworthy domestic leads and its direction will be largely dictated by overseas events.
As it is, key global indices are also in a state of flux amid prevailing concerns over the state of the global economy, particularly heading into 2024 where conditions are widely tipped to ease further due to high interest rate environment.
As such, such concerns could also continue to weigh on equity market sentiments, hence extending the unsettled market environment. With the key index again tethering at the 200-day moving average line at 1,437 points, vulnerability does prevail.
However, with key overseas indices posting a decent rebound overnight, the key index could find some near-term reprieve as it tries to regain some of yesterday’s losses and to move above the 1,440 level again.
Further ahead, the resistance is at 1,445 points while the supports are at 1,432-1,435 points, followed by the 1,430 level.
Malacca Securities Research
The FBM KLCI ended lower after digesting the neutral Budget 2024 given most of the things were within expectation except for the hike in SST (sales and service tax) to 8% which have impacted some of the consumer stocks.
Meanwhile, Wall Street rallied as investors were trading more positively heading into the first week of the 3Q 2023 earnings season despite the rising geopolitical tension.
Given the positive trading sentiment on Wall Street, we believe buying interest may emerge on the local front, focusing on the details of the Budget 2024 as well as the e National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP) blueprints.
Commodities-wise, Brent crude oil maintained above the US$90/barrel amid the ongoing geopolitical tension while crude palm oil (CPO) headed higher towards RM3,800/metric tonne with improved China demand and ahead of the Deepavali festival.
The FBM KLCI ended lower but maintained above the 1,430 level. The technical readings on the key index were positive with the MACD Histogram extending another positive bar and the RSI is hovering above 50.
The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 17, 2023