BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI ended Wednesday virtually unchanged as it recouped most of its intraday losses in the afternoon session on mild bargain hunting, mostly from local institutions.
The rebound also bucked concerns over Bank Negara Malaysia’s (BNM) surprise 25 basis points overnight policy rate (OPR) hike.
For the most part, however, market conditions were in the red as sentiments became cautious on renewed banking issues in the US that left losers double the number of gainers. The selling also escalated with total volumes jumping 20% for the day.
Although the key index managed to recover from its intraday pullback on Wednesday, the overall market conditions are likely to stay unsettled as the market assesses the impact of higher interest rates on the performance of rate-sensitive industries and companies.
In addition, fresh concerns over the US banking sector that sent most global equities lower will continue to reverberate and may leave market conditions on the cautious side for the time being with the FBM KLCI ending the week on a lower note.
Still, the key index may be supported by continuing mild buying support from domestic funds that could limit the downsides with the 1,420 support likely to hold. Further below, there is support at 1,415-1,417 points while the resistances are at 1,428-1,430 points and at 1,435 points respectively.
Malacca Securities Research
The FBM KLCI ended flat after erasing all its intraday losses as buying momentum emerged in the banking sector following Bank Negara Malaysia’s (BNM) surprise overnight policy rate (OPR) hike of 25 bps.
However, the fears over the US banking crisis remained in place which may limit the upside potential in the near term as investors may shift their position towards a more defensive approach at least until the banking crisis is resolved.
Nevertheless, traders may look to the corporate earnings season for earnings surprises. Meanwhile, gold price is hovering firmly above US$2,000/ounce.
The FBM KLCI recouped its intraday losses and closed flat, holding above its daily EMA20 level. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI hovered below 50.
Resistance is envisaged along 1,440-1,450 while the support is set around 1,400-1,410. – May 5, 2023
