The FBM KLCI (-0.04%) ended marginally lower, dragged down by selling pressure in the Banking and Industrial Products & Services sectors; in line with the regional markets’ performance as investors traded cautiously ahead of a few key economic data that will be released in the US.
The Day Ahead
Malacca Securities (MSSB) in a note today (Sept 3) said that the local market ended on a mixed note, with the FBM KLCI closing slightly lower, while the attention has shifted to small caps and lower liners.
Meanwhile, the US stock markets were closed for a public holiday.
With flat performances in European markets and several key economic data releases, such as ISM Manufacturing and jobs data, due this week, traders may remain cautious in the near term.
Currently, the market expects a 25 bps rate cut in this FOMC meeting.
In the commodity markets, Brent oil rebounded as oil exports at Libyan ports were halted on Monday, and production was reduced across the country.
Gold prices continue to trade sideways around the USD 2,500 mark, while CPO prices remain above the RM 3,900 level.
Sector Focus: They expected the heavy selling in small caps seen in August to be overdone, with lower liners likely to recover in September while heavyweights may take a breather.
Given the stronger ringgit performance over the past few months, sectors such as Consumer, Construction, Building Materials, and Property may benefit.
They also favour stocks with strong fundamentals and growing earnings in their recent results.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended flat at the 1,678 level.
However, the technical readings on the key index were positive with the MACD histogram forming another positive bar and the RSI trended above 50.
The resistance is envisaged around 1,693-1,698 and the support is set at 1,658-1,663.
Maybank Investment Bank (Maybank) said the KLCI was little changed yesterday.
Investors switched into a risk-off mode as Wall Street was closed on Monday.
At day’s end, the KLCI eased 0.61pts, or 0.04%, to close at 1,678.19pts.
Leading the decliners were PBBANK, PCHEM and CDB.
Market breadth, however, was positive, with gainers outnumbering losers by 679 to 467.
A total of 3.25b shares worth MYR3.02b changed hands.
The KLCI is likely to remain lacklustre today in the absence of fresh catalysts.
Sentiment should also stay cautious ahead of US jobs report as well as Bank Negara’s MPC meeting on Friday.
Technically, they expected the benchmark index to range between 1,670pts and 1,690pts today, with supports at 1,623pts and 1,596pts.
