BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was no reprieve for Malaysian equities as the selling continues with the key index slipping nearly 3.0 points to start the week.
Market conditions were decidedly negative on the weak sentiments engulfing regional equities that continues to be spooked by global economic concerns and the war in the Middle East.
The weaker ringgit further weighed on sentiments. The broader market was also severely affected amid the rampant selling that saw total losers overwhelming gainers by nearly four folds.
There is little change to the near-term market outlook as it remains morbid, weigh-down by the on-going headwinds that is not only engulfing the domestic equity market but also global equities.
With sentiments frayed, the outlook is likely to remain unsettled with the downside pressure to also persist.
As it is, the key index is hovering at its long-term moving average line and a breach of the line could exacerbate the already negative market sentiments.
Therefore, there could be some support to keep the key index above the 20-day moving average level of 1,437 which has become the “make or break” support level for the FBM KLCI.
However, if the line support is breached, the next supports are at 1,434 and 1,430 points respectively. The resistances, meanwhile, are at 1,440 points and 1,445 points respectively.
Malacca Securities Research
The local exchange remained challenging with selling pressure extending for the fourth session but the FBM KLCI was still supported above the 1,430 level.
Given the elevated US Treasury yields coupled with the on-going geopolitical tension in the Middle East, Wall Street ended mostly lower.
We believe traders will stay cautious and shift their focus on this eventful earnings week where mega cap corporations such as Microsoft, Alphabet, Meta and Amazon will be announcing their results.
Should these results beat estimates, buying support may emerge and put a pause to the recent selling tone.
Commodities-wise, Brent crude declined further below US$91/barrel while crude palm oil (CPO) traded below RM3,800/metric tonne.
The FBM KLCI ended lower but maintaining above the 1,430 level. The technical readings on the key index were negative with the MACD Histogram forming a rounding top formation and the RSI being slightly below 50.
The resistance is envisaged around 1,450-1,460 while the support is located around 1,420-1,430. – Oct 24, 2023
