BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI lost further ground yesterday amid a still weak market environment that resulted in the key index registering a new year low.
Part of the selling was due to weak China economic data that also raised concerns that the weakness could permeate to Malaysia as it is the country’s biggest trading partner.
The sustained selling was accompanied by an increase in traded volumes that rose to 3.5 billion shares with market breadth remaining decidedly negative.
We see little change to the immediate market outlook that will continue to be mired by uncertainties over the state of the global economy.
As it is, there are further signs of weakening in many global economic matrices that could point to potentially a more challenging 2H 2023.
Back home, the results reporting season has passed with corporate results generally more subdued than the preceding quarter, hence providing few fresh buying opportunities.
Meanwhile, the depreciating ringgit is also seeing increased foreign selling as they continue to tweak their portfolios.
Despite the already oversold conditions, there appears to be further downsides that may see the FBM KLCI re-test the 1,380-1,382 levels. Thereafter, the support is at 1,376 points while the resistances are at the 1,393-1,396 levels, followed by the psychological 1,400 level.
Malacca Securities Research
The FBM KLCI slumped for the second session alongside regional markets as investors took profit after the contraction in China’s factory activity dampened hopes for global economic recovery.
Investors may continue to watch the debate for US debt ceiling while taking a cautious trading approach.
At the same time, the labour market tightness and stubbornly high recent inflation data may continue to sap trading interest in the equities market.
Commodities-wise, Brent crude tumbled towards US$72/barrel while crude palm oil (CPO) price hovered above RM3,200/metric tonne.
The FBM KLCI drifted lower, breaching below its immediate support at 1,390. Technical indicators remained negative as the MACD indicators extended a negative bar while the RSI hovered below 50.
The next support is monitored at 1,370 while the resistance is set along 1,440-1,460. – June 1, 2023
