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 remains on the downtrend yesterday as it slid nearly 3 points to end just a shade above the 1,610 level.
The key index is still very much in a holding pattern as market players await the US Federal Reserve’s interest rate decision later today.
However, the lower liners tipped higher as bargain hunting remained on many of these stocks to allow market breadth to stay on the positive side. Traded volumes also picked up further to nearly 7 billion shares for the day.
We see conditions remaining relatively subdued among the index-linked constituents ahead of the Fed’s interest rate decision later tonight.
At the same time, domestic leads are also scant and this is also generating few impetuses for market players to follow with many of the index-linked stocks’ valuations being already fair after their strong YTD (year-to-date) gains.
Therefore, the key index could continue on its consolidation for the time being and looks to linger within the 1,600 and 1,620 levels as market players assess their prospects for the upcoming quarters.
The sideway trend may also be part of the key index’s base building process as the selling pressure is also relatively benign. There is an interim support at 1,605 points while the immediate resistance is at 1,615 points.
Malacca Securities Research
Despite the FBM KLCI closing in the negative territory, most of the buying interest was focused within the FBM70 and FBM Small Cap stocks by revolving around property and construction players in tandem with the rising data centre demand.
Meanwhile, the US stock markets ended mixed although both the S&P500 and Nasdaq closed at record highs with the boost from Apple after the WWDC 2024 (2024 Apple Worldwide Developers Conference).
In the near term, we expect traders to take a cautious view ahead of the conclusion of the two-day FOMC (Federal Open Market Committee) meeting as this may dictate the interest rate direction going forward.
At this juncture, it is widely anticipated that the Fed will keep the interest rate unchanged.
On the commodity markets, Brent crude continued to rebound above US$82/barrel while the FCPO (crude palm oil futures) slid below the RM4,000/metric tonne level.
The FBM KLCI index traded below the 1,615 level. The technical readings on the key index were positive with the MACD Histogram forming a rounding bottom formation while the RSI maintains above 50.
The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. – June 12, 2024
