BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The selling trend continues to dominate trades at the start of the week with losers overwhelming gainers by almost five-fold as market conditions were increasingly insipid due to the lack of positive leads.
Lingering concerns over the purported introduction of a windfall tax and potentially weaker banking earnings due to an interest waiver on loans moratorium also kept conditions guarded, while fears of a contagion effect from Evergrande’s debt fallout further roiled market confidence.
With sentiments still on the frail side, the weakness spell looks to continue over the near-term as the downside pressure is still dominating.
Concerns over the introduction of the new tax and potentially weaker banking earnings is unlikely to lift market confidence for the time being and could instead keep conditions insipid for longer.
Glove maker stocks could also endure more selling pressure due to their weaker growth prospects. Furthermore, the contagion fears from Evergrande’s fallout could also keep the stock market in-check for longer.
With the successive support levels breached, they are lowered further to the 1,520 and 1,513 levels. On the other hand, the hurdles are pegged at 1,535 and 1,540 points respectively.
Malacca Securities Research
Tracking the performance in the regional markets, the FBM KLCI registered its seventh straight session of decline as investors’ sentiment remained sour while foreign funds turned net seller for the second session (net selling of RM120.8 mil).
Given the negative Wall Street overnight, we believe the market may perform a knee jerk selling at the opening bell with bargain hunting activities emerging once the selling pressure is overdone.
In the meantime, the Government’s discussion on possibility of allowing inter-state tourism which may be seen as a mode for gradual economic recovery might be one of the few catalysts to cushion the downside risk for the near term.
Meanwhile, both crude palm oil (CPO) and crude oil prices extended their retreat.
Marking its seventh consecutive session of losses, the FBM KLCI crossed below the immediate support level at 1,535. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI continued hovering below the 50 level.
Next support level is located around 1,515 while the resistance is pegged along 1,580-1,600. – Sept 21, 2021
