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 broke its three-day losing streak yesterday as bargain hunting emerged on heavyweight construction companies like Gamuda Bhd and Sunway Bhd after their joint-agreement on the Johor-Singapore Special Economic Zone was signed.
The signing also buoyed the construction index as it emerged as the main sector winner. However, market breadth was still negative amid increased profit taking with traded volumes spiked to 3.9 billion shares for the day.
Although the key index managed to pose a recovery yesterday, it is still too early to determine that the downtrend has ended as profit taking activities are still prevalent, particularly on stocks that were chased up in the last year’s window dressing activities.
Much of the support were still from local institutions as foreign funds are still exiting Malaysian equities, hence keeping market sentiments in check.
With that, the market has yet to find a definitive footing as yet with the unsettled near-term outlook may still prompt the key index to slide again due to the thin buying interest.
On the downside, the supports are set at 1,625 points and 1,620 points respectively. The hurdles, meanwhile, remain at 1,635 points, followed by the 1,640 level.
Malacca Securities Research
The local front rebounded after its three-day losing streak with strong buying interest seen across the construction sector led by Gamuda Bhd.
In the US, all the three major indices closed lower as the ISM services data showed an acceleration, raising concerns about persistent inflation and reducing expectations for rate cuts in 2025 (from two rate cuts to one).
In terms of key economic data, traders will also keep track on the (i) Eurozone PPI Producer Price Index (PPI); (ii) China CPI (consumer price index); and (iii) US jobs report this week.
In the commodities market, Brent crude continued its upward momentum by closing above US$77/barrel while gold price traded flat around the US$2,650/oz. Meanwhile, CPO (crude palm oil) prices showed marginal gains but still trading below the RM4,400/metric tonne mark.
The FBM KLCI continued to stay above the moving average lines with indicators showing positive readings. The MACD Histogram is trading at the positive territory while the RSI is also above 50, indicating positive momentum at the current juncture.
Resistance is anticipated around 1,644-1,649 while support is set at 1,609-1,614. – Jan 8, 2025
