BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Despite holding steady in the morning session, renewed selling in the afternoon session resulted in the key index tumbling below the psychological 1,550 level as market conditions turned more cautious following the Bank Negara Malaysia’s (BNM) interest rate hike.
Selling pressure was rife with losers overwhelming gainers on more than a 3-to-1 ratio as the lower liners and broader market shares also saw heavy selling.
The intensified selling was also reflected in traded volume spiking to above 3 billion shares for the day.
The near-term outlook remains cautious with market players awaiting for the release of the country’s 1Q 2022 GDP data today which would provide a gauge on the country’s economic direction for the rest of the year.
As it is, market conditions are already frail on concerns over the state of the economy that is experiencing high inflation and supply shortages.
This is leaving market sentiments guarded with near-term direction looking uncertain.
With the key index slipping below its key technical support, the downside risk has also increased and this could see further near-term downsides.
Although there could be some bouts of buying support and bargain hunting, this is unlikely to provide much solace due to the prevailing weak sentiments.
The supports are now pegged at 1,533 and 1,525 points while the resistances are at 1,545 points and the 1,550 level respectively.
Malacca Securities Research
The FBM KLCI fell into the negative territory in line with regional peers as investors remained jittery following the overnight tumble on Wall Street.
Given the persistent inflation worries, we believe that selling pressure may prolong on Wall Street, translating to spill-over selling activities on the technology sector.
On the broader market, we expect bargain hunting activities to emerge in the recovery-themed and plantation sectors ahead of the reporting season.
On the commodities front, Brent crude was little changed at US$107/barrel as OPEC+ was struggling to meet the output target while crude palm oil (CPO) price hovered around RM6,400/metric tonne.
The FBM KLCI pared early gains and dipped into the negative territory, swinging below the SMA200 level. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI is hovering below the 50 level.
Next support is located around 1,500-1,510 while resistance is pegged around 1,570-1,580. – May 13, 2022
