BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
After a weak start to the session, Malaysian equities rebounded yesterday with the FBM KLCI regaining half the losses it posted in Monday’s rout as bargain hunting emerged on some of big losers.
The recovery also extended to the broader market shares with many of the battered lower liners regaining some ground after the sell-off.
As a result, gainers topped losers on a 3-to-1 ratio with traded volumes coming in at 6.4 billion shares, lower than Monday’s mostly selling volumes.
We see the FBM KLCI attempting to find more stability after the recent sell-off and this should help to ease selling pressure in the day ahead.
As it is, market conditions have found some measure of calmness as many key global indices also put some of their steep sell-down to rest for now but the recession risk has risen somewhat after the spate of weak economic data that could keep markets unsettled for longer.
For now, the key index should mirror the performance of global equities overnight and could make further recovery in the day ahead.
However, the gains could also be more modest as market players assess the strength of the on-going stock market recovery.
Therefore, the key index could target the 1,580 level first before attempting to climb back to the 1,590 level. On the downside, the supports are at 1,570 and 1,565 points respectively.
Malacca Securities Research
As expected, the market rebounded significantly with the FBM KLCI having jumped 2.47% with emergence of bargain hunting activities following the significant oversold conditions.
Meanwhile, the US stock markets ended positively but were still unable to close the earlier gap down move, rising around 0.76-1.04% on the three major indices.
Still, we believe the market will focus on the Japanese yen reverse carry trade incident by trading cautiously, hence upside could be limited for now.
In the commodity markets, Brent crude extended its decline below the significant support of US$77/barrel while gold price trended sideways along US$2,400/oz. Elsewhere, FCPO (crude palm oil futures) price trended nearer to RM3,700/metric tonne.
The FBM KLCI index rebounded higher towards 1,574 level. However, the technical readings on the key index were mixed with the MACD histogram forming another negative histogram bar and the RSI rebounded from the oversold zone.
The resistance is envisaged around 1,589-1,594 while the support is set at 1,554-1,559. – Aug 7, 2024
