BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities were still down-trending as it slipped below the 1,380 support yesterday due to the sustained selling by foreign funds.
In the process, the key index also retested its 2022 low set in October last year. Yesterday’s selling was largely in tandem with the weakness in regional equities that reacted to China’s poor export performance.
Consequently, most stocks on Bursa Malaysia also lost pace with energy counters being the biggest losers. Expectedly, market breadth was in the negative territory.
With the selling pressure still prevailing, hopes for a rebound appear remote for the time being despite the already severely oversold conditions.
As it is, investor confidence remains frail, hampered by lack of catalysts and concerns over the country’s economic and corporate earnings outlook after a disappointing 1Q2023 results performance.
Leads from overseas equity markets are also thin, particularly among regional equities and collectively, these unsavoury factors could continue to leave the FBM KLCI to drift further.
With successive technical support levels already breached, the supports are now lowered to around the 1,370 and 1,372 levels respectively. A break of this level could send the key index to the next support at 1,365 level which was last seen in April 2020. The immediate hurdle is at 1,380 points, followed by the 1,385 level .
Malacca Securities Research
Selling interest continued in the FBM KLCI with anticipation over the slower economic recovery in China in view of its higher-than-expected decline in its export data for the May 2023 period.
Hence, concerns over the global economic recovery coupled with a few key economic data that will be released next week such as the US consumer price index (CPI) may keep investors in a cautious mode.
Nevertheless, we still expect the current level of FBM KLCI to attract bargain hunting activities from investors as values could be emerging.
Commodities-wise, Brent crude traded above US$76/barrel while crude palm oil (CPO) price hovered slightly below RM3,350/metric tonne.
The FBM KLCI slid in a subdued trading session as the key index tested its 52-week low at 1,372. The MACD Histogram has extended a negative bar but the RSI is oversold, suggesting that the FBM KLCI could be due for a technical rebound.
Resistance is set along 1,400-1,440 while the support is located at 1,360-1,370. – June 8, 2023
