Is The Market Poised For A Rebound?
The FBMKLCI continued its momentum for the fourth day, closing higher at 1590 with many of the sectors closing on a positive note, the Transportation & Logistics sector showing the strongest rally. Meanwhile, REIT was the only sector that ended in red.
Notably, Malacca Securities noted that Wall Street ended lower amid slowing employment data, as the number of Americans applying for first-time unemployment benefits came in more- than-expected. Meanwhile, both the European and Asian markets traded higher, as traders brushed off concerns over US-China trade tensions.
The local bourse edged higher for the fifth day, buoyed by gains in MAYBANK and PETGAS. In the US, Wall Street closed lower, with S&P 500 and Nasdaq losing their gains together with the Dow ending lower, as initial jobless claims data came in higher-than- expected. All eyes will be on the nonfarm payrolls later today, which will help Fed determine the path of interest rates ahead.
In the commodities market, Brent crude oil dipped towards USD74.3 per barrel following Trump’s renewed pledge on bringing
down oil prices, while gold prices retreated marginally from its all-time high, trading around USD2,856 level. Meanwhile, CPO prices regained momentum and broke above the RM4,400 mark.
Amid the ongoing US-China trade war, the house opines that the local Gloves and Technology counters will benefit from the rising tensions. The trade war could also prompt manufacturers to diversify their production bases, further solidifying the China+1 strategy and strengthening Malaysia’s position as a strategic industrial hub, which may benefit the Construction, Building Materials, and Utilities sectors. Lastly, traders can also look into the newly listed solar-related IPO, Northern Solar (M+ TP: RM1.12), which gained 25% on its ACE Market debut.
The key index surpassed its EMA20 with technical indicators showing positive signs, including a positive MACD histogram just started to form while RSI is trending off its oversold zone. Malacca Securities said the resistance is anticipated around 1,600-1,605, while support is set at
1,565-1,570.
