rakuten trade market reports : Page 15

Middle East tension has taken for the worse with Iran’s latest retaliation on reports that missiles were fired targeting US airbase in Iraq with crude oil price and gold price jump on the news.
Regional markets are expected to see risk off mode and take a beating. Likewise, we expect FBM KLCI to see weakness and may test 1,600 support level.
Nevertheless, there are still trading opportunities as investors could position themselves on the Oil & Gas stocks such as Hibiscus, Armada, Yinson, Icon and gold related stocks such as Bahvest or Gold ETFs.

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As expected, there is a sudden U-turn as investors returned to equities with Wall Street staging a relief rebound yesterday touting that the tension in the Middle east as not too bad. Meanwhile, we believe regional markets to follow suit after yesterday’s sell-down.
Therefore we anticipate the FBM KLCI to see a mild rebound with immediate resistance at the 1,605 level.
Meanwhile, both the crude oil and CPO prices remain rather solid hence may see continued buying interests on the Oil & Gas and Plantation related stocks.

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Fresh tension in the middle east has had investors scurrying for shelter into safe havens namely the Japanese Yen and Gold. Gold prices especially has climbed to a multi-year high surpassing the US$1,570/oz mark.
As a result, we reckon equities will be under some selling pressure following the 200 plus points decline in the DJI Average index last Friday.
The FBM KLCI is seen to trend lower today with 1,600 being the psychological support level.
Nonetheless, we believe any drastic selling should present as windows of buying opportunity since usually there will be knee jerk reactions during such events.

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New year offers new hopes as we saw the DJI Index closing in on the 29,000 mark. With Wall Street remains on solid ground, we expect the same for regional markets spearheaded by China on optimism of an early US China trade agreement.
On the local front, decent valuations driven by an anticipated improving corporate performance should attract more foreign funds inflow following a pathetic 2019.
We expect the FBM KLCI to test the 1,610 level today with buying interests on the Plantation sector to persist.

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Wall Street ended 2019 on a high, the US and China are going to seal phase 1 of their protracted trade discussion plus we are into a new decade. All these should be positive for the regional equity markets and expect some upside today.
On the domestic front, after a pathetic finale for 2019 we reckon buying should emerge today. Judging from the solid MYR now at 4.09/US$1, we believe there are foreign monies circulating within the local financial system and may mop up equities on a cheap.
As such, we foresee the FBM KLCI to breach the 1,600 mark today.
Do keep an eye on the plantations sector as consensus are upgrading the sector to OVERWEIGHT following the uptrend of CPO prices now at above the RM3,100/MT.

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