What to expect on Bursa Malaysia on Thursday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

It was yet another down day for stocks on the FBM KLCI as the key index reversed the minor gains it attained a day earlier.

Glove maker stocks provided the support due to rising COVID-19 cases worldwide, but other index constituents slipped as there were still few noteworthy market leads.

The lower liners, however, made further headway as they continue to recover from their bout of oversold, sustained by mild bargain hunting activities.

We maintain our view that market conditions are still largely insipid, affected by the lack of positive leads to spur fresh buying which is reflected in the thinner overall market participation.

At the same time, the market is left directionless due to the still high local COVID-19 cases as well as wariness over the increasing infection trend overseas, highlighting challenges the world faces before the pandemic subsides.

In light of this, we think the FBM KLCI’s largely sideway trend will continue on bouts of institutional supports that would mitigate some of the mild selling pressure that appears to be still prevalent from foreign sources.

We also expect the key index to linger within the 1,500 and 1,520 levels over the near term as it attempts to build up a base. Below 1,500, the support is at 1,492 points while the other resistance is at the 1,530 level.

Malacca Securities Research

The FBM KLCI extended its losses after a volatile session due to persistent selling activities as COVID-19 infection rates stayed high amid the Delta variant.

However, we believe the high number of COVID-19 cases may shift investors’ focus to the healthcare sector while broader market sentiment could stay tepid without any fresh catalysts.

Investors may watch Malaysia’s inflation rate which will be released tomorrow.

Commodities-wise, oil price has staged a rebound in expectation for a higher demand amid economic recovery.

The FBM KLCI closed lower for a second session as the key index failed to hold on to its gains despite higher opening.

Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level.

The key index may continue to consolidate with resistance set at 1,525-1,548 while the support level is located at 1,500. – July 22, 2021

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