BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI stumbled further yesterday by slipping below the psychological 1,600 level at the close amid the persistent selling pressure that also unwound all of the gains it attained recently.
The selling activity escalated in tandem with similar trend in most regional indices as market players await several central bank decisions on interest rates.
In the same vein, stocks in the broader market also retreated further on profit taking activities, resulting in market breadth staying in the negative territory.
We see near-term market conditions staying subdued due to the prevailing sell-down of index-linked stocks by foreign institutional players.
This also means that firmer window dressing activities are looking increasingly unlikely at this juncture due to the heightened selling pressure.
Although local institutions are providing some support, their buying has been piecemeal and selective, hence unlikely to provide significant lift to the key index.
With the key index’s inability to gather significant traction, the insipid trend is likely to continue for now, thus leaving the key index below the 1,600 level for the time being.
The supports are at now at the 1,590-1,593 levels, followed by the 1,585 level which would also be the key index’s lowest level since August this year. The hurdles, meanwhile, are at 1,600 points and the 1,603-1,608 levels respectively.
Malacca Securities Research
The FBM KLCI continued to trend lower for second session after Press Metal Aluminium Holdings Bhd weighed on the sentiment.
In the US, November retail sales exceeded expectations, indicating that the economy remains on a growth trajectory.
However, this data had no impact on the Federal Open Market Committee (FOMC) meeting outcome with traders pricing in a 25 basis points (bps) cut.
Furthermore, traders will closely monitor several key data releases, including (i) US gross domestic product (GDP); (ii) Unemployment Claims; (iii) Core PCE Price Index; and (iv) the Bank of Japan (BOJ) monetary policy conference.
In the commodities market, Brent crude traded around US$72-US$73/barrel as weak demand from China limited the upward momentum.
Despite stronger retail sales, gold prices traded flat around the US$2,650/oz mark while CPO (crude palm oil) prices continued to retreat for another session by trading below the RM4,700/metric tonne level.
The FBM KLCI continues to retreat after hitting the 60-day moving average line. As the MACD histogram has formed a new negative bar and the RSI has trended below 50, this suggests that the momentum is negative at the current juncture.
Resistance is anticipated around 1,612-1,617 while support is set at 1,577-1,582. – Dec 18, 2024
