BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks stumbled yesterday, taking the cue from regional equities that also fell due to the wariness over the direction of equity markets ahead of the release of more earnings reports from US megacaps.
As a result, the key index slipped below the 1,620 level with technology stocks being the day’s main losers.
Elsewhere, the FBM ACE index shed nearly 2.0% which left market breadth decidedly on the negative side. Traded volumes, however, were little changed.
Conditions on Bursa Malaysia remains fluid, unable to gain significant traction with few fresh leads to strengthen market sentiments.
As a result, the FBM KLCI could drift further in the day ahead as there are also few signs of recovery as yet due to the lack of impetus and fresh buying interest.
While the US Federal Reserve is likely to keep interest rates unchanged this week, the spate of below expectation results from some technology bellwethers is also keeping investor confidence on domestic tech stocks on a low gear for now.
Therefore, the downside bias remains with the key index unlikely to mount any significant recovery over the near term. The supports are now at 1,610 and 1,605 points while the hurdles are at 1,620 and 1,625 points respectively.
Malacca Securities Research
From a decent start of the day, the FBM KLCI took a sudden change of course into negative territory led by selling pressure on selected utilities heavyweights.
Meanwhile, technology stocks in the US were beaten down prior to the conclusion of the Federal Open Market Committee (FOMC) meeting.
Despite Microsoft Corp’s earnings having beaten consensus, its share price was down post-market due to a mildly weaker cloud segment which may drag AI (artificial intelligence)-themed stocks in the near term.
The two-day FOMC meeting and the sentiment on the US election are the near-term key focuses which may provide high volatility in the markets.
In the commodity markets, Brent crude declined further below US$79/barrel despite US inventories falling for five weeks straight while gold regained its climb above US$2,400/oz. Elsewhere, CPO (crude palm oil) price traded sideways along RM3,900/metric tonne.
The FBM KLCI index ended lower towards 1,611 level. The technical readings on the key index were negative with the formation of another negative MACD histogram and the RSI dipping below 50.
The resistance is envisaged around 1,639-1,654 while the support is set at 1,604-1,609. – July 31, 2024
