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 from last Friday’s sell-down to regain back the 1,380 level as bargain hunting emerged on plantation stocks to aid the FBM KLCI’s recovery.
In addition, energy stocks also made headway on higher crude oil prices with many lower liners and broader market shares posting firmer performances as well.
This allowed market breadth to return to the positive side that was accompanied by firmer market with traded volumes climbing back above the 2 billion shares mark.
Although the key index managed to mount a rebound yesterday, the near-term outlook remains indifferent due to the lack of catalysts and pointers for market players to follow.
The prevailing headwinds like slower global economic growth coupled with prospects of higher interest rates will continue to cloud prospects for the country’s external trades.
Domestically, the upcoming tightly contested state elections would also leave Malaysian equities cautious for the time being.
While the FBM KLCI may still tip higher over the near term due in part to continuing bargain hunting and mild positivity among global equities, we see limited upward potential as most market players are still on the sidelines.
As a result, the key index could just linger within the 1,380 and 1,390 levels for the time being. The immediate hurdle is at 1,385 points while the other support is at 1,375 points.
Malacca Securities Research
The FBM KLCI delivered a strong performance yesterday on a broad-based rebound while the economy continues to demonstrate resilience after the unemployment rate in May 2023 was held steady at 3.5%.
We expect an extended recovery to take place over the near term as investors are likely to bargain hunt on beaten down and oversold stocks.
The calmer market condition also presents opportunity for rotational play among the lower liners though we caution that the pace of the recovery may be limited.
Elsewhere, investors may keep a close watch on the US inflation rate that will be released tomorrow night which may provide further clues over the direction of interest rate in the US.
Commodities-wise, Brent crude price eased below US$78/barrel while crude palm oil (CPO) price edged up near RM4,000/metric tonne.
The FBM KLCI formed a bullish candle but remain below EMA20. Technical indicators stayed mixed as the MACD Histogram formed another positive bar but the RSI lingered below 50.
The immediate resistances are envisaged along 1,413-1,430 while the support is pegged around 1,370. – July 11, 2023
