BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks ended the week on another solemn note to end below the critical 1,500 level and at its year low.
Selling was widespread on the key index with losers continuing to dominate trade as weak sentiments deterred fresh buying interest.
It was also a similar downtrodden tone among the lower liners and broader market shares as they too saw increased selling activities. The dour undertone resulted in the overall market breadth remaining decidedly negative.
Market conditions are likely to stay frail at the start of the week as investor sentiments are still on the thin side.
As it is, market players are becoming increasingly wary following the FBM KLCI’s breach of its successive technical support levels that has left it reeling as well.
At the same time, there are few noteworthy buying opportunities even as valuations are becoming more compelling after the key index constituents’ recent weakness.
The feeble conditions among key global stock indices looks to also preserve the key index’s insipid trend for longer.
With selling pressure to continue dominating trades, the key index may also slip below the 1,490 support and head towards the supports at the 1,480-1,485 level. The hurdles, meanwhile, are at 1,500 and 1,505 points respectively.
Malacca Securities Research
The FBM KLCI posted steep losses last Friday amid regional pull-back except for China’s stock markets; net foreign selling in the past five sessions stood at RM446.2 mil.
Global stock market undertone could remain negative as the blistering inflation in the US may fan investors’ worries on further interest rate hikes and more quantitative tightening going forward.
We believe the global weakness will spill over to the local front with limited bargain hunting activities as investors trade cautiously ahead of US Federal Reserve’s and UK Bank of England’s interest rate decision this week.
The crude oil price was supported above US$20 while the crude palm oil (CPO) price slid, closing above RM5,900/metric tonne.
The FBM KLCI tumbled below the critical 1,500 level. Technical indicators remained negative as the MACD Histogram has extended a negative bar while the RSI fell below the 30 oversold level.
The next support is pegged around 1,450-1,475 while the resistance is pegged along 1,500-1,530. – June 13, 2022
