BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI gave back most of its recent gains in a pullback yesterday as quick profit taking became evident on selected telcos, services and banking entities.
There was also a pick-up in selling from foreign institutions on the back of increasing cautiousness over the region’s performance due to China’s energy crunch.
As a result, market breadth remained negative although the recovery of technology and small cap stocks was sustained.
The mostly cautious market undertone is likely to prevail for longer as we see external events dictating the FBM KLCI’s near term performance amid the few local market developments.
This is particularly so with China facing an energy crisis that could also impact Malaysia’s manufacturing sector.
However, local commodity players like planters may secure support on higher palm oil prices while the Finance Ministry’s decision not to impose a windfall tax could provide some reprieve.
Although the downside pressure remains, there should be some light bargain hunting to also provide the much-needed support.
Therefore, we think the key index should find support at the 1,530 level with the ensuing support at 1,520 points. On the other hand, the hurdles are at 1,540 and 1,550 points respectively.
Malacca Securities Research
On the final day of 3Q 2021, the FBM KLCI ended lower after hovering mostly in the negative territory as broad-based sentiment remained cautious amid mixed regional performances as well as concerns from the US.
Given the weak sentiment from Wall Street, we expect the consolidation phase to persist for the near term.
Commodities-wise, we noticed that crude palm oil (CPO) price has traded above the RM4,500/metric tonne mark on the back of supply concerns as production normally peaks in Sept-Oct and on decent prospects of rising demand under the recovery environment.
Meanwhile, the Baltic Exchange Dry Index continued to hover above the 5,000 mark.
Snapping a three-day gain, the FBM KLCI fell below the daily EMA9 level. Technical indicators remained negative as the MACD Histogram has extended a red bar while the RSI continued hovering below the 50 level.
Resistance is located at 1,550-1,560 while the support is pegged along 1,515. – Oct 1, 2021
