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, aided by selective bargain hunting on some of the recently beaten down stocks – particularly among oil and gas (O&G) stocks – mainly on support from local institutions as foreign funds remain net sellers.
This helped most Bursa Malaysia indices to make headway with gaining stocks ahead of losing ones, albeit some end-of-day profit taking limited the rebound.
Market participation also increased to its highest level in two weeks.
Despite the market’s rebound and its attempts at finding a base, we think the upsides may be short-lived following the introduction of a tighter lockdown in the Klang Valley that will see most economic activities grinding to a halt for two weeks amid the unabating new COVID-19 cases.
This will exacerbate the already weak economic and corporate earnings outlook that was affected by the prolonged movement restrictions and would leave sentiments to drift further.
With the frail sentiments to take hold for longer, the downside bias will also continue and the supports at the 1,530 and 1,520 levels are likely to come into play. The near-term hurdles, on the other hand, are at 1,542 and the psychological 1,550 level respectively.
Malacca Securities Research
The FBM KLCI started off 2H 2021 with modest gains as bargain hunting activities emerged after the heavy sell-off in the previous session.
The imposition of enhance movement control order (EMCO) in most areas in Selangor and Kuala Lumpur due to the continued high infection rates may further weigh on investors’ sentiment.
Crude palm oil (CPO) surged after India reduced import duty of CPO to 10%, while Brent oil price climbed mildly after OPEC+ postponed its decision on the oil production plan amid recovering demand for oil while market participants are expecting an increase in oil production going forward.
The FBM KLCI rebounded from the year’s low to close mildly higher, despite a pullback was noticed in the final trading hour.
Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI hovered below the 50 level.
The resistance will be located around 1,560-1,580 with the support level is envisaged around 1,520. – July 2, 2021
