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’s consolidation continues as it lost more ground yesterday albeit more minor after the key index managed to extricate from the day’s low.
Market conditions were still subdued for the most part with the lack of buying impetus that left Malaysian equities to sustain its downward drift.
Expectedly, market breadth remained negative as the broader market also remained lacklustre and resulted in traded volumes slipping back below the 3 billion shares level.
Although there are still few indications of a rebound from oversold conditions as yet, the key index may still attempt to end the week on a positive note as the selling seems to be abating, judging by yesterday’s late rebound.
The return of bargain hunting activities could be boosted by the improved global equity markets overnight which shall restore buying interest on some of the recently beaten down stocks in the banking, plantation, and energy sector stocks.
Nevertheless, the potential upsides could be measured as the market’s undertone is still largely cautious and this could slow any market recovery prospect.
Consequently, the key index’s recovery could find resistance at the 1,386-1,390 levels for the time being. Further above, the resistances are at the 1,396-1,400 levels. The supports, on the other hand, are at yesterday’s low of 1,378 points and 1,373 points respectively.
Malacca Securities Research
The FBM KLCI remained under pressure amid persistent cautious sentiment without significant fresh catalyst.
Nevertheless, following the passing of US debt ceiling bill and the subsequent rebound on Wall Street, bargain hunting activities may emerge on the local bourse.
Still, cautiousness may prevail with the spotlight turning towards the release of US jobs data that may dictate the interest rate direction. Investors may prefer stocks with defensive characteristics towards the end of the earnings season.
Commodities-wise, Brent crude traded above US$74/barrel while crude palm oil (CPO) hovered just below RM3,300/metric tonne.
The FBM KLCI dipped further in subdued trading, marking its third consecutive session of decline. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI hovered below 50.
The next support is located at 1,370 while resistance is pegged along 1,400-1,440. – June 2, 2023
