BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities went nowhere on Friday (July 2) as market conditions were still cautious ahead of the implementation of a stricter lockdown in Selangor and the unabating COVID-19 cases.
Gains were punctuated by renewed selling that dissipated the early day’s gains to leave market breadth negative for the day.
However, ACE Market stocks mounted a stronger recovery amid the continuing rotational interest in some of its constituents.
Although Malaysian equities are looking to find a base after its recent weakness, we think overall conditions are still fluid with market players still wary of the ongoing movement restriction on the country’s economic well-being.
The uncertainties, coupled with the lack of leads, are still affecting investor sentiments and confidence that could leave the market to drift for longer with the downside risk also still prevalent.
This could delay the market’s recovery even though it is already deemed oversold from the recent sell-down.
For now, we think the key index could continue to trend in a narrow range at the start of the week, lingering within the 1,530 and 1,540 levels. The other support and resistance levels are at 1,525 and 1,548 points respectively.
Malacca Securities Research
The FBM KLCI edged lower in a volatile week following the implementation of enhanced movement control order (EMCO) in parts of Selangor and Kuala Lumpur.
Having said that, market sentiment may improve as five states in the country are moving into Phase-2 of the National Recovery Plan (NRP).
Nevertheless, upside could be capped on the FBM KLCI as investors could stay cautious as COVID-19 daily cases remained above 6,000.
Meanwhile, investors may monitor Bank Negara Malaysia’s (BNM) interest rate decision this week to position themselves in the stock markets.
Commodities-wise, crude palm oil (CPO) price rose for the fourth consecutive day, while Brent oil is trading near US$76.
The FBM KLCI posted modest losses after erasing most of its intraday losses in the second trading session.
Technical indicators turned mixed as the MACD Histogram turned green, while the RSI hovered below 50.
The key index may trade in a tight range with bargain hunting activities in sight. Resistance is envisaged around 1,560-1,580, while the support is set around 1,520. – July 5, 2021
