BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was no reprieve for Malaysian equities as selling activity was sustained yesterday to send the key index to another year low as well as to its lowest since November last year.
Market conditions remained frail due to the rising COVID-19 cases and worries over the impact of prolonged lockdown on the domestic economy.
Selling was also widespread as losers thumped gaining stocks on a 2-to-1 ratio with foreign funds remaining the sellers for the day.
The market’s near-term outlook remains fraught by uncertainties over its direction as the pandemic is making it difficult for the country to move into the next phase of the recovery plan which means that the economy will be stuck at a low gear at the start of 2H 2021.
There is also unease over the country’s political environment that would preserve the cautious undertone, and this is likely to leave sentiments weak for the time being.
Consequently, we expect the downside risk to remain with selling likely to continue over the near term.
This would add to the market’s already frail conditions after the key index slipped below the psychological 1,550 level earlier in the week.
There is a minor support at the 1,530 level before the 1,520 level comes into play. The resistances, on the other hand, are at 1,540 and the psychological 1,550 level respectively.
Malacca Securities Research
The FBM KLCI wrapped up the first half of 2021 with a new year-to-date low as the high number of COVID-19 daily confirmed cases which stayed above the 6,000 mark, coupled with uncertainties in the recent political developments.
However, we expect bargain hunting activities on the local bourse to emerge as Parliament may reconvened by August 2021 where MPs will be able to discuss and resolve issues revolving the nation going forward.
Commodities-wise, oil prices rose on the report of lower US inventories. Market may monitor the decision on the next phase of production policy in the upcoming OPEC+ meeting amid demand recovery.
The FBM KLCI has broken its immediate support level at 1,540, forming a new year-to-date low.
Technical indicators remained mixed as the MACD Histogram has extended a red bar, but the RSI hovered slightly above the 30 level.
With that, downward momentum may persist over the near term with resistance set at 1,560-1,580 while the next support level is located at 1,520. – July 1, 2021
