Rebound from recent losses with half key index components gain

The FBM KLCI (+0.7%) rebounded from recent losses, driven by gains in more than half of the key index components yesterday as bargain hunting emerged. The lower liners also recovered, while the Property sector (+1.9%) outperformed among its sectoral peers.

Market Outlook – Index components gain

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“Although the FBM KLCI managed to march higher to end its losing streak, we believe the recovery might not be sustainable. Investors are likely to adopt a cautious approach while awaiting the Fed’s interest rate decision this Thursday.

“Likewise, we expect the rally on the lower liners to come to a halt as stocks retraced from their overbought levels. Economic wise, investors will be keeping an eye onto a slew of economic data from EU such as 2Q24 GDP data, consumer inflation expectations, business confidence and others that is expected to be release today

“Moving forward, we expect to see some trading opportunity in transportation sector after Transport Minister Anthony Loke express hope to develop and enhance the infrastructure at existing ports, aiming to make Malaysia a ‘homeport’ for cruise ships. Conversely, oil & gas stocks might come under pressure with weakness in Brent oil prices, as traders remain unfazed by the Israel-Hezbollah escalation,” says APEX.

FBM KLCI Technical Review & Outlook

Technical Commentary:The FBM KLCI rebounded to snap a three-day losing streak as the key index bounced off SMA50. Indicators have turned mixed as the MACD Line hovered below the Signal Line, while the RSI hooked above 50. Immediate resistance located at 1,650. Support is envisaged around 1,580.

Global Markets Review

US stock markets turned flattish as investors eagerly awaits on the upcoming release of corporate results and key economic data. The European stock markets closed mostly lower, while Asia stock markets advanced higher with Japan’s Nikkei leading gains in the region as the US inflation print raised hopes for a rate cut.