BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Market conditions turned frail yesterday with sell-off escalated among ASEAN equities that also sent the FBM KLCI to its lowest level in two years.
Plantation and energy stocks contributed the bulk of the key index’s losses as commodity prices retreated further.
Conditions elsewhere were also insipid with losers more than doubled the number of gaining stocks. The difficult market conditions also left traded volumes below the 2 billion mark again as market players stayed on the sidelines.
There appears to be little reprieve for Malaysian stocks as they are likely to stay insipid due to rising global inflationary threat that could also preserve the challenging economic conditions for longer.
The concerns could leave equities on the wayside for now with the FBM KLCI poised to follow the weakness of global equity indices overnight and ease further on the increasing odds that global interest rates will be raised at a more rapid pace to contain inflation.
With the key index taking out successive supports, it is now lowered to the psychological 1,400 level. If this is breached as well, the next supports are at 1,394 and 1,390 points respectively.
In the meantime, the resistances are at the 1,418-1,420 levels followed by 1,425 points.
Malacca Securities Research
The FBM KLCI slipped as its rebound attempt stalled amid broad-based sell-down and negative cue from Wall Street.
Investors are beset by mounting recession fears following US economic release which saw inflation roared 9.1% year-on-year.
Meanwhile, Indonesia’s temporary freeze on sending migrant workers to Malaysia may prolong the labour shortages across all sectors, particularly in the plantation and manufacturing sector.
Commodities-wise, Brent crude oil price remained below the US$100/barrel mark while crude palm oil (CPO) price hovered around RM3,850/metric tonne.
The FBM KLCI fell below its immediate support level at 1,420 as the key index slid to a new 52-week low. Technical indicators remained negative as the MACD Histogram has expanded further below zero while the RSI is approaching the oversold territory.
The next support is located at 1,400 followed by 1,380 while the resistance is pegged along 1,430-1,460. – July 14, 2022
