BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Although the key index was positive for most of the session, it lost ground at the end of the day to maintain its losing streak and bucking the regional markets improved performances.
There end-of-day selling on banking stocks largely contributed to the FBM KLCI’s decline which also nullified the recovery in plantation stocks.
Market breadth stayed negative as the broader market was mixed-to-lower and market interest remained thin with traded volumes falling below the 2 billion shares mark again.
Despite the attempts to shore-up the FBM KLCI, the market continues to stay lacklustre due to its prevailing uncertain direction.
With sentiments staying morbid, the low participation rate also looks to prolong, and this could preserve the insipid condition for the time being.
However, the key index could still mount a recovery, premised on its attempts to find some support around the 1,420 level and the slight improved outlook for equities.
Mild bargain hunting could emerge that may help the key index to end the week on a firmer note ahead of the long weekend and to also break its downward spell.
If the key index holds its ground and climb back above the 1,420 level, the next targets are at the 1,428-1,431 levels followed by the 1,440 level. The supports, on the other hand, are at 1,414 and the 1,400 levels respectively.
Malacca Securities Research
The FBM KLCI extended its decline as the key index was dragged by selling pressure in the banking and industrial products heavyweights.
Nevertheless, we believe the overnight rallies on Wall Street, coupled with the China’s stimulus plan should entice buyers to scoop up some shares within the beaten-down stocks at this current juncture.
Still, long-term sentiment should remain cautious on the back of heightened inflationary pressure.
Commodities-wise, both Brent crude oil and crude palm oil (CPO) rebounded, trading above US$104/barrel and RM4,250/metric tonne respectively.
The FBM KLCI breached its immediate support at 1,420, closing below the 52-week low. Technical indicators remained mixed as the MACD Histogram extended a positive bar while the RSI remained below 50.
The next support is located at 1,400 while resistance is envisaged around 1,460-1,480. – July 8, 2022
