BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities lost ground again as it gave back some of the gains it attained earlier in the week.
The market was spooked by fears of a faster-than-expected tapering of US stimulus measures that also afflicted most regional indices.
Coupled with the lack of domestic leads, market breadth remained negative as losers nearly doubled gaining stocks for the day as many lower liners also succumbed to a fresh bout of selling.
Although the FBM KLCI slipped yesterday, it remains within our expected range as the general market undertone is still one of cautiousness, affected by the unsettled political environment and the rampant COVID-19 cases domestically.
As such, we continue to think that the unsettled market conditions are likely to prolong as most market players are still wary of the market’s near-term outlook that is also seeing many market participants staying on the sidelines for now.
The reduced market following would result in the market staying insipid for longer even as the selling pressure is still benign.
For now, we think the key index could linger within the 1,500 and 1,520 levels with the interim support located at the 1,510 level. The other hurdle remains at 1,530 points.
Malacca Securities Research
The FBM KLCI snapped two-session winning streak and closed lower in tandem with regional peers as investors booked profit amid a fragile sentiment following the US Fed’s bond-buying taper talks.
However, we believe factors such as a clearer picture on the political front, further relaxed standard operating procedures (SOPs) in National Recovery Plan (NRP) Phase 1 states as well as corporate earnings season by this month could contribute to trading interest within the local bourse.
Nevertheless, the downside risks include the high COVID-19 daily infections as well as the declining crude oil price. Also, crude palm oil (CPO) price has been retreating below the RM4,500 level.
The FBM KLCI retreated after hovering in the negative territory for the entire session. Technical indicators, however, turned mixed as the MACD Histogram has turned into a red bar, while the RSI is hovering above the 50 level.
Next resistance is located around 1,540, while next support level is set around 1,480. – Aug 20, 2021
