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The ongoing correction on Wall Street may see heightened volatility within the region hence “we expect the benchmark index to gyrate within a narrow range of between 1,630-1,640 today,” analysts say.
The FBM KLCI (+0.02%) eked out marginal gains after advancing into the positive territory in the final trading hour with a hammering of the tech sector.
The lower liners ended mixed, while the Technology sector (-2.0%) was hammered in tandem with the weakness on technology players in US overnight.
Meanwhile, the Property sector (+1.3%) was the biggest winner to close at the highest level since March 2018.
Apex Research says a consolidation may take place with the key index looking to defend the 1,630 pts as the recent rally took a breather.
“We reckon that downward pressure may take shape amid the renewed volatility on Wall Street, while investors search for fresh leads. The lower liners may also undergo a downward bias consolidation mode with many of the stocks teetering in the overbought territory.
“Over the interim, key focus will turn towards the preliminary reading of Malaysia’s 2Q24 GDP data later today with consensus pointing towards growth rate of 4.2%. Sector wise, we are turning defensive in view of the renewed volatility, favouring the REIT and Utilities sector.
“We expect the Technology sector to remain downbeat, taking cue from the negative performance of Nasdaq overnight,” says Apex Research.
Technical Commentary: The FBM KLCI formed a hammer candle as the key index defended the 1,630 level yesterday. Indicators remained positive as the MACD Line trended above the Signal Line, while the RSI hovered above 50. Immediate resistance located at 1,650. Support is envisaged around 1,580.
Wall Street took a beating as the Dow sank -1.3%, snapping a six-day winning streak after investors brushed off the optimism over the potential rate cut and flagged risk of economic slowdown following the cooling jobs data. Meanwhile, both the European and Asia stock markets finished mixed.
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