BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks endured a quick pullback yesterday, erasing the gains they attained on Tuesday as there were no follow through buying support.
Plantation stocks that strongly rebounded a day earlier reversed their gains to become the major losers yesterday.
Lower liners and broader market shares also succumbed to continuing selling pressure to lose further ground. Expectedly, losers continue to dominate trades with market breadth turning negative once more.
The FBM KLCI’s inability to follow through with the recovery leaves it in a state of flux again and this is likely to preserve the insipid market trend for longer.
Fresh buying interest is still sorely lacking due to the headwinds that the global economy is facing that also shows few signs of abating anytime soon.
Therefore, the mostly cautious market undertone is likely to be preserved and the FBM KLCI could still find it hard to gather momentum for a noteworthy recovery over the near term.
Nevertheless, the rebound on Wall Street overnight could provide some respite to Malaysian equities albeit concerns over higher interest rates could keep sentiments guarded for longer and any rebound is likely to be mild.
The near-term hurdles are at the 1,470 and 1,480 levels while the supports are at the psychological 1,450 points and 1,435 points respectively.
Malacca Securities Research
Following the conclusion of the two-day US Federal Open Market Committee (FOMC) meeting that saw the pace of the interest rate hike came in line with market expectations, we think that markets conditions should turn calmer.
Mild bargain hunting activities may emerge at least for the near term after majority of the stocks have fallen into the oversold territory.
Still, we reckon that the lack of fresh market catalysts and anxieties over the lingering inflationary pressure could result in market environment to remain wary and cautious overtime which may keep the upside limited.
Meanwhile, the price of Brent crude has declined below US$120/barrel while crude palm oil (CPO) is trading around RM5,600/metric tonne.
The FBM KLCI took another dive as the key index reversed all its previous session sharp gains. Technical indicators stayed negative as the MACD Histogram extended a negative bar while the RSI slipped back into the oversold territory.
Support is pegged along 1,430-1,450 while the resistance is set at 1,500-1,530. – June 16, 2022
