BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities remained on the slide at the start of the week, spooked by the sell-down in China and greater China stocks following the Chinese Government’s crackdown on the tech and education sectors.
Locally, there were also few leads while the elevated COVID-19 cases continue to dampen sentiments, resulting in most stocks and indices closing in the red with profit taking dominating on lower liners and broader market shares that gained recently.
Despite yesterday’s pullback, the key index remains within its base building range and may have been just a knee-jerk reaction to overseas developments.
While there is still a lack in domestic catalysts and the still high coronavirus cases will leave sentiments guarded, we see some buying support that will hold the key index above the 1,500 psychological level for the time being.
A stay above the psychological level is crucial to ensure that the market could sustain its base building and to provide a potential springboard for the key index to mount a firmer recovery when the pandemic conditions eases later in the year.
In the interim, there is support at the 1,510 level while the hurdles are at 1,520 and 1,530 points respectively.
Malacca Securities Research
Investors started off the week on a softer note as both the FBM KLCI and the broader market slumped in line with the negative performances in China and Hong Kong shares amid concerns over tightening regulations on selected sectors.
However, we expect bargain hunting activities to emerge on the local bourse after the sell-down as market players might have priced in news from China or Hong Kong.
Meanwhile, investors should focus on vaccination rate instead of ongoing high number of daily COVID-19 cases as the Government will be looking on re-opening business activities going forward.
Commodities-wise, both the crude palm oil (CPO) and crude oil prices extended their gains.
The FBM KLCI slipped into the negative territory shortly after the market opened and closed below the daily EMA9 level. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI hovered below the 50 level.
Given the technical readings are still negative, the key index may continue to consolidate above the support around 1,500, while the resistance is located at 1,530. – July 26, 2021
