BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
It was a volatile session on Bursa Malaysia which started the holiday shorten week strongly in response to the surge in oil prices, only to turnaround and lose significant ground on heavy selling on banking stocks albeit energy stocks providing some cushioning effect to keep the key index above the 1,580 level.
The broader market and lower liners also succumbed to fresh selling which resulted in losers overwhelming gainers by a wide margin. Meanwhile, foreign funds were the main sellers for the day.
Market conditions are expected to stay challenging in the day ahead following Wall Street’s sharp pull-back overnight that has roiled market sentiments again.
As it is, market conditions are already turning cautious after yesterday’s steep falls on Bursa Malaysia and with the global recession risk increasing in developed countries, sentiments on local stocks are also likely to stay increasingly muted.
At the same time, market players will be staying on the sidelines as they wait for Bank Negara Malaysia’s (BNM) decision on interest rates next week.
Under the prevailing environment, the weakness spell on Bursa Malaysia looks to continue over the near term which will result in the 1,580-support remaining under threat.
If the level is breached, the support is lowered to 1,575 and 1,570 points respectively. On the flipside, the hurdles are at 1,590 and 1,595 points respectively.
Malacca Securities Research
The FBM KLCI slid below the key 1,600 level in mid-day as weakness in banking and telecommunication heavyweights weighed on the key index.
We believe the market could be pricing in softer economy growth globally as China is still having lockdowns on and off in various regions.
Given the violent sell-off on Wall Street overnight, we believe the technology sector may continue to struggle.
Nevertheless, elevated commodity prices should continue to support the relevant sectors such as energy and plantation; Brent crude price remained supported above US$110/barrel mark while crude palm oil (CPO) price is hovering above RM6,600/metric tonne.
The FBM KLCI slipped into the negative territory to close below the 1,600 and SMA50 levels. Technical indicators turned negative as the MACD Histogram has extended a negative bar while the RSI fell below the 50 level.
Resistance is pegged along 1,600-1,620 while the support is set at 1,550-1,560. – May 6, 2022
