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 started the week on a negative note as selling pressure remained that also saw the key index slipping below the 1,440 level at the close.
For most of the day, the key index lingered within a tight range but with foreign funds still disposing their shareholding on index-linked heavyweights, the downtrend remained.
At the same time, the lower liners succumbed to more profit taking after the recent rebound, resulting in market breadth deep in the negative territory at the start of the week.
There are still few near-term impetuses to drive the market higher amid the availability of few notable leads. As a result, the largely directionless trading conditions are likely to remain a feature for the time being.
Instead, market players will now await for the upcoming results reporting season next month for trading ideas and leads.
The upcoming results will provide a gauge on the possible corporate earnings performances in 2024 which could allow market players to adjust their portfolios accordingly.
In the interim, Malaysian stocks could be heading higher in the day ahead as it reacts to the overnight positivity on Wall Street that appears to be in some end-of-month window dressing after a wretched month for their equities.
The rebound should see the FBM KLCI regaining the 1,440 level with the next hurdles set at the 1,443-1,445 levels, followed by the psychological 1,450 points level. The immediate support remains at the 200-day moving average line of 1,437 points, and at 1,430 points respectively.
Malacca Securities Research
Tracking the softer closing on Wall Street last Friday, the FBM KLCI ended softer for the session amid the mixed regional markets’ sentiment.
However, the US stock markets have gained strongly after a solid start for the corporate earnings and bargain hunting activities emerged.
Given the 10-year US Treasury yield was below the 5% mark, the overall buying support on the equities remains strong.
However, we expect the traders to turn cautious nearer to the two-day Federal Open Market Committee (FOMC) meeting which will be held today (Oct 31) and tomorrow (Nov 1).
A few important data that traders may focus on will be the (i) China Manufacturing PMI; (ii) US ISM Manufacturing PMI; and (iii) jobs data.
Despite the widening of geopolitical tension, Brent crude prices have eased more than 3% for the session towards US$87.45/barrel.
The FBM KLCI ended slightly lower but still hovering within the flag formation. The technical readings on the key index are slightly positive with the MACD Histogram extending its rebound off the zero level while the RSI is slightly below 50.
The resistance is pegged around 1,450-1,460 while the support is at 1,420-1,430. – Oct 31, 2023
