BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The imposition of 24% tariffs of Malaysian goods into the US continues to affect sentiments with the FBM KLCI’s retreat deepening as foreign funds resumed their hefty selling, sending the key index to near the 1,500 level at the close.
The weak sentiments also prevailed among the lower liners with most sector indices losing more ground as market volumes thinned to just 1.8 billion shares for the day. Market breadth was also decidedly negative with losers topping gains on a 4-to-1 ratio.
We continue to see weakness among Bursa Malaysia stocks, spooked by the emerging trade war between the US and its major trading partners.
Already China has reciprocated its tariffs on US products, notching up the trade dispute that is likely to escalate when other countries impose similar tariffs on US goods in a tit-for-tat move, hence raising the spectre of a global recession.
As a result, market sentiments are likely to stay dour with the 1,500 level could be breached again amid the increased selling pressure on equities.
Due to the heighted concerns, the fall could even be more severe although we think the FBM KLCI’s year-to-date (YTD) fall has partly priced-in the tariffs.
Below the 1,500 level, the supports are pegged at 1,493 points and 1,487 points respectively. If the selling is more severe, the key index could slip to around the 1,480 level amid the lack of buying support. On the flipside, the resistances are at 1,510-1,513 levels, followed by the 1,520 level.
Malacca Securities Research
We believe the heavier tariffs on Chinese glove manufacturers are expected to shift market dynamics in favour of Malaysia’s glove manufacturers.
As such, we anticipate the recent rebound to continue, driven by (i) healthy restocking activities; and (ii) additional tariffs on top of the 60% duty imposed on Chinese glove players as well as (iii) measles outbreak in the US.
With Prime Minister Datuk Seri Anwar Ibrahim stating that the Malaysian economy remains stable and is not headed into recession, we expect the banking sector to present a buying opportunity on dips.
Meanwhile, REITs could serve as a defensive play, offering stable earnings outlook supported by rising footfall and high payout ratios which should cushion market uncertainties.
The key index continued to trend below the MA (moving average) lines amid current volatile environment with technical indicators showing mixed signals at the current juncture; MACD histogram stayed above zero while the RSI is trending below 50.
Resistance is anticipated around 1,519-1,524 while support is set at 1,484-1,589. – April 7, 2025
