BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Political uncertainties coupled with rising COVID-19 cases resulted in Malaysian equities taking a dive yesterday, closing at its lowest level since November last year.
Market conditions were overwhelmingly negative with all Bursa Malaysia indices closing in the red as losers thumped gainers by a wide margin.
Lower liners and broader market shares were among the biggest losers amid escalation of selling activities.
The near-term outlook remains fragile, undermined by the increasingly uncertain local political environment and severity of the COVID-19 epidemic that shows few signs of abating as yet.
There are also few positive corporate developments and leads from overseas sources to encourage fresh buying from market players.
With market conditions remaining frail, we see little support with the key index likely to drift lower again with the 1,500-points level serving as the next major support.
This support nevertheless looks precarious as the selling pressure is still prevalent; if it fails to hold, the next support is down to 1,490 points. The hurdles, meanwhile, are at 1,517 and 1,525 points respectively.
Malacca Securities Research
The FBM KLCI pulled back for the fifth session as investors’ sentiment stayed cautious on the back of high number of daily confirmed COVID-19 cases which climbed above the 8,000 mark, coupled with recent political development.
We expect the current trading tone to persist as market is lack of fresh positive catalysts. However, we believe bargain hunting activities may emerge in the near term due to the significant sell-down and oversold tone across the board.
Commodity-wise, oil price has seen a rebound following an improved inventory draw.
The FBM KLCI has continued its downtrend move, breaking the immediate support level at 1,520. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI hovered just above the 10 level.
We expect the downtrend move to continue over the near term with resistance set at 1,525-1548, while the support level is envisaged around 1,500. – July 9, 2021
