BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was continued buying support as the key index ended last week at the 1,600 level just before the extended break.
Local institutions provided most of the buying support, mainly on oil & gas (O&G) stocks amid the strengthening oil prices as other leads were far-and-in between ahead of the holidays.
The broader market and lower liners also closed mostly higher to end the week with market breadth staying positive. Expectedly, traded volumes were mostly subdued amid the lack of fresh leads.
The FBM KLCI is again at the crossroads as there are still few noteworthy domestic leads to provide fresh buying impetuses even as US markets staged a strong rebound overnight.
At the same time, the latest US interest rate hike may temper expectation on local equities, prompting local stocks to retreat once again, particularly as the US recession risk has increased, hence affecting Malaysia’s economic outlook.
Therefore, the local market is likely to stay subdued as many market players are still on an extended Hari Raya break.
However, potential gains in O&G stocks may provide some cushioning effect for the market after oil prices rose in reaction to Europe’s ban on Russian oil.
There are supports are the 1,595 and 1,590 levels while the hurdles are at 1,605 and 1,610 points respectively.
Malacca Securities Research
The FBM KLCI surpassed the 1,600 level prior to the long weekend as investors took cue from the positive performance on Wall Street.
As the US Federal Chair eased the concern over a more aggressive rate hikes outlook, we foresee that the big surge on Wall Street overnight may spill over to the stocks on the local front.
Despite the worries over COVID-19 lockdown in China would slowdown economic growth, we believe elevated commodity prices may provide support for the respective sector at least for the upcoming reporting season.
Crude palm oil (CPO) price has surged past RM7,100/metric tonne while the Brent crude remained firm above US$110/barrel; the latter rose as the European Union (EU) may potentially ban imports of crude oil from Russia.
The FBM KLCI extended gains and closed above the key 1,600 level prior to the long Hari Raya break. Technical indicators were mixed as the Histogram has turned negative while the RSI is above 50.
Should the key index hold above 1,600, the next resistance is envisaged at 1,620 while the support is located at 1,570-1,580. – May 5, 2022
