BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index continues to rally at the start of the week in tandem with the jump in regional indices as market players were holding out for a positive outcome on the negotiations between Russia and Ukraine.
Plantation stocks again powered the FBM KLCI higher as palm oil continues to improve with foreign funds dominating the buying interest.
However, the broader market and lower liners whittled on profit taking, resulting in market breadth turning negative.
The record palm oil prices will continue to hold its own and could provide the upside impetus to the market over the near term.
At the same time, rotational interest among the index heavyweights may also drive the market higher amid the sustained buying of foreign funds that are seen as the main drives to lift the FBM KLCI over the near term.
Still, volatility could be creeping up after the recent gains that could prompt fresh bouts of profit taking and may temper with the near-term upsides.
This could also mean the recent high of 1,610-1,615 levels may still prove to a formidable level to clear.
Beyond these levels, the other resistance is at the 1,620 level while the immediate support is at the psychological 1,600 level followed by the 1,595 level.
Malacca Securities Research
The FBM KLCI outperformed the mixed regional bourses with significant gains despite the lingering geopolitical tensions.
Despite the mixed sentiment on Wall Street, we believe the positive sentiment will continue on the local bourse given the (i) increasing inflows of foreign funds; (ii) firmer crude palm oil (CPO) prices which may translate to upside on the plantation sector; and (iii) decent performance in the banking sector’s results.
Nevertheless, upside might be capped with the unsettled Russia-Ukraine geopolitical tension. Meanwhile, investors should keep an eye on the Bank Negara Malaysia’s (BNM) interest rate decision on Thursday (March 3).
The FBM KLCI extended its gains to close above the 1,600 psychological level. Technical indicators, however, remained mixed as the MACD Histogram has extended a negative bar, while the RSI trended higher above the 50 level.
The next resistance is pegged around 1,615 while the support level is located around 1,570-1,580. – March 1, 2022
