M+ Morning Market Buzz - 31 May 24

Dow Jones: 38,111.48 pts (-330.06pts, -0.86%)
⬆️ Resistance: 40100
⬇️ Support: 37300

FBM KLCI: 1,604.26 pts (-1.09pts, -0.07%)
⬆️ Resistance: 1660
⬇️ Support: 1580

HSI Index: 18,230.19 pts (-246.82pts, -1.34%)
⬆️ Resistance: 19400
⬇️ Support: 17800

Crude Palm Oil: RM3,993 (-RM3, -0.08%)
⬆️ Resistance: 4130
⬇️ Support: 3780

Brent Oil: $81.86 (-$1.74, -2.08%)
⬆️ Resistance: 86.80
⬇️ Support: 79.10

Gold: $2,343.07 (+$1.75, +0.07%)
⬆️ Resistance: 2420
⬇️ Support: 2280

M+ Market update – 31 May 24
Downward Bias May Persist

After building multiple fresh 52-week highs prior to the earnings season, the FBM KLCI has headed for a pullback over the past few trading days as profit taking activities emerged. Despite a slight increase in US GDP, Wall Street ended on a weaker tone after digesting mixed corporate earnings from Dell, Zscaler, MongoDB and Gap. Also, the traders will be watching closely on the PCE index that will be released on Friday, this will be crucial for the Fed to determine the interest rate direction going forward. On the commodity markets, Brent oil still traded within the consolidation phase, but had a downward biased trading tone as it rejected USD84 level twice this month. The CPO price has pulled back below RM4,000 level, but we believe the overall trend is turning higher in the near term on the back of recovering demand from China.

Sectors focus: Data center will be the key theme at this juncture following Google’s USD2bn investment in data center and cloud services in Malaysia. We believe it may benefit stocks within the Technology sector related to HDD, EMS and cybersecurity. Other sectors that will benefit under this theme include (i) Construction, (ii) Property, (iii), Building Materials and (iv) Utilities. For the corporate earnings, PMETAL, WASCO and ARMADA have shown decent results and may attract traders’ attention.

Stocks to watch:

Building Material: ASTINO, ENGTEX, LBALUM, MNHLDG
Consumer: FFB, SPRING
Gaming: GENM, GENTING
Solar: PEKAT
Shipping: SWIFT

Source: M+

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