What to expect on Bursa Malaysia this Wednesday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

The downside extended on Bursa Malaysia with most stocks ending lower once again in tandem with the weakness among regional indices and the increasingly cautious market undertone after the recent strong gains.

Market breadth was decidedly negative with losers more than doubled the number of gainers.

This saw key barometers like the FBM KLCI, FBM Small Cap and FBM ACE Market indices all in the negative zone at the close with total trades slipping below 5.0b units for the day.

There is no change to our immediate view whereby we think market conditions will remain unsettled for the time being.

As it is, the consolidation phase looks to prolong with profit taking activities set to extend following the strong YTD (year-to-date) gains that has seen the key index rising some 10%.

Nevertheless, market fundamentals remain firm despite the ongoing market pullback and this is deemed as healthy for the FBM KLCI to take a breather from the strong uptrend.

With much of the corporate fundamentals already reflected, the continuing pullback would also allow the key index to build-up a base around the 1,600 level which should also prove to be a firm support for now.

In the interim, there is another support at the 1,610 level while the resistances remain at the 1,620 and 1,630 levels respectively.

Malacca Securities Research

The FBM KLCI extended its pullback mode as profit taking activities persisted in the broader market.

Meanwhile, Wall Street traded on a mixed note as the Nasdaq was pushed higher towards the 17,000 level for the first time led by the rally in NVIDIA as investors stayed bullish reassessing its stronger-than-expected results driven by the demand for generative artificial intelligence which drove the record data-centre revenue but the Dow Jones declined 0.55%.

Key events that traders will be monitoring include (i) manufacturing PMI (Purchasing Managers’ Index); (ii) unemployment claims; (iii) core PCE (Personal Consumption Expenditures Price) index; and (iv) US GDP (gross domestic trade) data.

Brent crude jumped above the US$84/barrel level amid expectation of the US driving season should offer a boost to demand ahead of the OPEC+ meeting. Meanwhile, CPO (crude palm oil) price also headed higher for the session by hovering near the RM4,000/metric tonne level.

The FBM KLCI index ended lower for the third session. The technical readings on the key index were mixed with the MACD Histogram extending the first negative bar while the RSI fell maintains above 50.

The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. –  May 29, 2024

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