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 tipped lower once again to end at its lowest level in a month as fresh selling became more widespread with most index heavyweights ending lower, particularly among glove maker and banking stocks.
The selling also extended to the broader market amid the lack of leads and fresh political intrigue that sapped sentiments. As a result, market breadth was overwhelmingly negative due to the increased selling pressure.
The near-term outlook remains frail, in our view, with selling pressure looking to continue dominating market sentiments in light of availability of few positive leads and lingering uncertainties over the domestic political environment.
The unabated pandemic conditions are also casting doubt over the fight against COVID-19 and this will also continue to weigh on sentiments for longer.
Despite the recent market weakness, there is little to suggest that a firmer rebound is on the cards and as such, we think the downside pressure remains for the time being.
This could see the key index revisiting its recent low of 1,562 points but if this gives way, the next supports at 1,557 and the psychological 1,500 level would come into play. The hurdles, meanwhile, are at 1,570 and 1,575 points respectively.
Malacca Securities Research
The FBM KLCI failed to extend its gains amid pervasive negative sentiment and weak buying interest bucking the regional uptrend.
With the World Bank cutting Malaysia’s 2021 gross domestic product (GDP) growth projection amid slower-than-expected economic recovery, the sideways trade is likely to persist without a fresh catalyst under the current economic and public health crisis.
Investors may also look at the US’ 1Q 2021 GDP growth rate alongside Bank of England’s interest rate decision (which will be released tonight) for direction.
Commodities-wise, oil price has risen above the US$75/barrel level.
The FBM KLCI has retreated to close below the immediate support level at 1,565. Technical indicators stayed negative with the MACD Histogram extended another red bar, while the RSI is below 50.
With the 1,565 support level broken, the key index may further pullback trend. The next support level is set at 1,555, while the resistance is envisaged around 1,580. – June 24, 2021
