BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index managed to end yesterday with minute gains despite lingering in the negative territory for much of the day, boosted by continuing buying interest on selected index-linked stocks and in tandem with the gains in regional indices.
Much of the gains were supported by banking stocks as market conditions were mixed with many broader market shares ending in the red, succumbing to bouts of mild profit taking that left market breadth negative. Traded volumes also slipped below 4 billion shares.
We continue to think that the near-term market conditions are likely to stay largely positive as the market waits for the release of the country’s 2Q 2024 GDP (gross domestic product) this Friday (Aug 16).
Much of the stability will be from the prognosis of better-than-expected economic performance over the quarter, hence likely to mend sentiments further.
At the same time, global equities are still making headway, thus should also help to sustain the key index’s upsides.
Still, we think that the upsides could be more modest as the key index approaches its recent highs again where there are significant hurdles.
On the upside, the resistances are pegged at the 1,615 and 1,620 levels while the supports are at 1,605 points and the psychological 1,600 level respectively.
Malacca Securities Research
The FBM KLCI traded mildly positive but the broader local market ended mostly negative ahead of the US Producer Price Index (PPI) data release.
With the PPI data coming in slightly better than expected, sentiment in the US turned bullish, leading to strong buying interest, particularly in technology heavyweights.
We believe this buying interest may spill over to local stocks. Traders will also be monitoring several key economic data releases, including the CPI (Consumer Price Index) later tonight, retail sales and the manufacturing index (later this week).
In the commodity markets, Brent crude retreated more than 1% as concerns over Middle East tensions eased while gold price rose above US$2,460/oz due to the potential rate cut in September. Meanwhile, CPO (crude palm oil) price have declined below RM3,700/metric tonne.
The FBM KLCI index ended higher towards the 1,609 level. The technical readings on the key index were positive with the MACD histogram forming positive bar and the RSI stayed above 50.
The resistance is envisaged around 1,614-1,629 while the support is set at 1,589-1,594. – Aug 14, 2024
