Ahead of Monday's holiday for the Islamic New Year, the Malaysia stock market had snapped the two-day winning streak in which it had climbed more than 15 points or 1 percent.
The Kuala Lumpur Composite Index now sits just above the 1,610-point plateau although it may move back to the upside again on Tuesday.
Malacca Securities (MSSB) in a note today (July 9) said the FBM KLCI (-0.35%) ended lower as the index was dragged by selling pressure in the Telco and Utilities heavyweights as investors were taking profits reducing their exposure prior to the long weekend after 2 consecutive days of positive gains on the index.
The Day Ahead
Both the FBM 70 and FBM Small Cap declined marginally but are still hovering along the all-time high zone prior to the long weekend holiday.
Meanwhile, the US stock markets ended mixed with both S&P500 and Nasdaq closing at records, while the Dow lagged.
Investors will be watching the upcoming CPI and PPI data as that may dictate the interest rate directions taken by the Fed.
They believed the inflationary pressures have been on the declining trend and that should allow the Fed to potentially lower down the interest rate in 2H2024.
On the commodity markets, Brent oil had declined for the past 2 trading days after hitting resistance around USD88, while the gold price traded above USD2360.
The CPO could be forming a rounding bottom and a flag formation, awaiting a breakout above RM4,100.
Sectors focus: Sentiment has turned better last week for the local front and they might be anticipating more upside potential on various sectors driven by the data center catalysts following the investment from several MNCs earlier on.
Meanwhile, they believed the outcome of the KL-SG HSR project will be announced in 2H24 and may boost the appetite for stocks within the Construction, Property, Building Materials, and Utilities sectors.
Bloomberg FBMKLCI Technical Outlook
The FBM KLCI index ended lower towards the 1,611 level.
However, the technical readings on the key index were positive with the MACD histogram forming another positive bars and RSI surged above 50.
The resistance is envisaged around 1,626-1,631 and the support is set at 1,591-1,596.