BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
After failing to clear the 1,632 level, the FBM KLCI retreated yesterday to end below the 1,630 level.
Earlier in the day, the key index gained further ground to re-test its recent intraday high of 1,634 but conditions turned more cautious in the afternoon session when profit taking activities set in.
The broader market shares also succumbed to profit taking, resulting in market breadth turning negative. Traded volumes also slipped below the 5 billion shares mark for the day.
With the 1,632-level proving to be a more formidable level to clear, it remains to be seen if the FBM KLCI’s upsides could prolong even as key global indices made strong gains overnight.
However, the still positive undertone for equities could allow the level to be re-tested again as hopes rise for a first US interest rate cut in September that should give equities a leg up over the near-term.
At the same time, foreign funds are still making a beeline into Malaysian equities with their interest likely to continue over the near-term amid the prospects of further improvements in the demand for the country’s exports that could also led to a stronger corporate earnings recovery.
If the 1,632-1,634 levels are penetrated, the ensuing hurdles remain at 1,636 and 1,642 points respectively. The supports, also remain at the 1,620-1,623 levels, followed by the 1,615 level.
Malacca Securities Research
Profit taking activities emerged on the local front led by industrial products and technology stocks.
Meanwhile, the US stock markets rose in anticipation of potential rate cuts in the upcoming September Federal Open Market Committee (FOMC) meeting with the Dow posting its best jump since 2023 while investors could be rotating to small caps in view of lower debt repayment rate with the potential rate cut by 2H 2024.
Meanwhile, traders will be watching out for the industrial products and unemployment data later this week.
On the commodity markets, Brent crude fell to end below US$84/barrel amid lingering demand concerns from China while gold price shot up strongly towards new highs. Elsewhere, CPO (crude palm oil) price rebounded to around RM3,850/metric tonne.
The FBM KLCI index ended lower towards the 1,625 level. The technical readings on the key index were positive with the MACD histogram having formed another positive histogram bar and the RSI continues to trend above 50.
The resistance is envisaged around 1,640-1,645 while the support is set at 1,605-1,610. – July 17, 2024
