BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Selling was overwhelming as Malaysian equities took cue from last Friday’s Wall Street sell-off to also pull-back below the 1,600 psychological level.
The negative sentiments also sent the key index to end the day below the 1,590 level with most index constituents, save for plantation stocks, ending in the red.
The broader market and lower liners were also in a sea of red, resulting in total losers nearly three times more than gainers. The selling volume also picked up to above 3 billion shares for the day.
After yesterday’s market weakness, there could be a quick rebound as market players could bargain hunt on some of the big losers.
This follows Wall Street’s overnight turnaround that should also permeate to the local market.
However, the rebound may still be tentative as sentiments are staying mostly cautious as market players await for the upcoming Federal Reserve interest rate decision that could have a telling effect on the ringgit.
At the same time, market players could also elect to stay on the sidelines ahead of the long break next week.
Therefore, the key index may still find the 1,600 level a formidable level to clear over the near term. There is an interim hurdle at the 1,595 level while the supports are at 1,585 and 1,580 points respectively.
Malacca Securities Research
The FBM KLCI skidded below the key 1,600 level as selling pressure dominated the local bourse amid bearish regional sentiment driven by concerns over China’s COVID-19 situation and in anticipation of a more hawkish interest rate hikes tone by the US Federal Reserve.
While bargain hunting activities may emerge following yesterday’s decline, we expect investors’ sentiment to remain wary with an upside on the FBM KLCI being limited around 1,600 for now.
Still, we are optimistic on the recovery-themed sectors on the back of declining COVID-19 daily confirmed cases.
On the commodity front, Brent crude is hovering above US$100/barrel while crude palm oil futures (FCPO) traded above RM6,200/metric tonne.
The FBM KLCI snapped a three-session winning streak, turning away from the key 1,600 resistance and closed below its daily EMA20 level. Technical indicators turned negative as MACD Histogram is below zero while the RSI crossed below 50.
Resistance is set at 1,600-1,620, while the support is located at 1,580. – April 26, 2022
