BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks continue to head lower yesterday as global equities reacted negatively to the escalating trade war between the US and its main trading partners = Mexico, Canada and China.
On Bursa Malaysia, selling activity was overwhelming with losers beating gainers on a 10-to-1 ratio.
Expectedly, lower liners also fell with the FBM ACE market index shedding a hefty 3.0% while the FBM Small Cap Index tanked 2.7%. Traded volumes also rose 21% amid the flight to safety.
There is no change to the near-term market conditions as market conditions are staying weak with sentiments severely affected by the heightened worries that the trade war will lead to slowdown in global trades and the economic growth.
At the same time, stagflation concerns have also risen that could see interest rates pivoting upwards again if inflation picks up as prices could rise due to tariffs.
As a result, the choppy market conditions will prevail amid the continuing flight to safety and could remain so until the market finds stability.
On the downside, the supports are lowered to the psychological 1,547-1,550 levels, followed by the 1,540-1,542 levels which would be the FBM KLCI’s lowest level in a year. On the flipside, the resistances are at the 1,560-1,562 levels, followed by the 1,565 level.
Malacca Securities Research
Selling pressure in the local bourse persisted, dragged down by YTL-related counters. Foreign institutional outflows continued for the 19th consecutive week.
In the US, all three indices gapped down following President Trump’s implementation of tariffs on imports from Canada, Mexico and China. These nations have announced retaliatory measures, escalating concerns about a global trade war.
President Trump is also set to deliver his first Congress address later today with significant attention focused on potential insights regarding Ukraine.
In the commodities market, Brent crude fell below US$72/barrel while gold prices remained flat around the US$2,900/oz range but CPO (crude palm oil0 prices dropped below RM4,400/tonne.
The key index continued to trade below the EMA bands with technical indicators showing signs of slowing down. The MACD positive histogram has turned zero while the RSI is hovering below 50, indicating weakening momentum.
Resistance is anticipated around 1,570-1,575 while support is set at 1,535-1,540. – March 5, 2025
