Opening Daily Highlight
Local
Faltering market sentiment
Fri, 20-Dec-2024 07:20 am
by Research Team • Apex Research

  • Malaysia Market Review: The FBM KLCI saw minimal movement, rising by +0.03%, as investors stayed cautious while assessing the Fed's rate outlook. Similarly, the lower liners ended mixed, while the Utilities sector (+3.2%) outperformed among its sectoral peers.

     

  • Global Markets Review: Wall Street closed mixed as treasury yields peaked at 4.5%, piling pressure onto equities markets. Meanwhile, Asian and European markets declined in tandem with Wall Street's sell-off on Wednesday, as investors reacted negatively to the Fed's conservative interest rate outlook.

     

  • Market Outlook: While the local bourse delivered a positive stance yesterday, gains were relatively measured as sentiment remained cautious following the recent volatility. We expect the index to remained choppy, in view of the softer global market performance with the key index attempt to defend the 1,600 psychological level. The lower liners may also see a muted trading activity on the back tepid trading sentiment. Foreign funds are likely to continue be the net seller on the local bourse, as slower rate cuts by the US Fed could strengthen the USD, prompting funds to flow back to the US. Economic wise, investors will focus on Malaysia’s inflation rate as well as US Michigan Consumer Sentiment.

     

  • Sector focus: Given the gloomy economic outlook, with the US, Europe, and Asia signalling caution over easing monetary policy, coupled with oversupply concerns, we advocate investors to avoid O&G stocks. We also foresee the plantation sector to face selling pressure in line with the continued weakness in CPO prices.

     

  • Technical Commentary: The FBM KLCI formed a bullish candle to recover all its intraday losses as the key index closed marginally above the 1,600 level. Indicators remained mixed as MACD Line floated above the Signal Line, while the RSI lingered below 50. Immediate resistance is located at 1,625. Support is envisaged around 1,570.

Sentiment: Positive
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Market Mover
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