BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities mounted a rebound yesterday to break its losing streak. The upsides were also decent as this allowed the key index to climb back above the 1,420 level at the end of the day.
There was bargain hunting on some of the recent losers in the banking sector and Tenaga Nasional Bhd while the lower liners and broader market shares were also modestly higher, thus allowing the market breadth to turn positive. Traded volumes, however, were little changed.
Despite yesterday’s rebound, there is little change to the immediate market outlook with the key index likely to continue with its mostly sideway trend.
For the most part, buying interest is still relatively insipid due to the lack of leads and this is likely to keep the market range-bound for now.
Lack of catalysts will keep investor participation on the low side for longer, preventing a stronger rebound potential.
Nevertheless, mild bargain hunting may still be in the offing to preserve some of yesterday’s rebound but the gains are likely to be mild as the FBM KLCI could only look to stay above the 1,420 support for now.
Below this level, the support is at 1,417 points while the hurdles are pegged at the 1,425-1.428 levels, followed by the 1,435 level.
Malacca Securities Research
The FBM KLCI rebounded to end the session higher, snapping the fivr-day losing streak as bargain hunting activities emerged.
Overall, the US stock markets were weaker, awaiting news on the debt ceiling negotiations between congressional leaders and President Joe Biden. Meanwhile, Janet Yellen reiterated her concerns if the debt ceiling is not raised and the country may face defaulting as early as June 1.
Given the uncertainties in the US, we believe the selling pressure may spill over to the local front, capping the upside potential on the FBM KLCI.
Commodities-wise, Brent crude is hovering around US$74-US$75/barrel while crude palm oil (CPO) fell below RM3,500/metric tonne. Gold price also fell below USD2,000/ounce.
The FBM KLCI rebounded after a five-day losing streak. Technical indicators are suggesting that the momentum is relatively weak at this juncture with the negative MACD Histogram and the RSI being below 50.
We believe the upside could be capped around 1,435-1,450. Support is located around 1,400-1,410. – May 17, 2023
