BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The rout continues on Bursa Malaysia with most stocks heading south to extend their selling streak for a third straight day and to leave the key index tethering at the critical 1,550 level as growth concerns escalated.
The selling was widespread with losers overwhelming gainers on more than a 3-to-1 ratio. Plantation stocks were among the most affected sector on increased profit taking, while Serba Dinamik Holdings Bhd was the top loser as it resumed trading after a six-month suspension.
There is no change to the market’s near-term outlook and conditions will remain challenging due to the prevailing weak sentiments that are dampened by rising global stagflation fears.
The sustained selling on global equities overnight will also permeate to local equities with the downside bias to still dominate trades over the near term.
Plantation stocks could again be pressured by the sell-off in commodity stocks, while buying interest elsewhere will continue to be on the low side as market players are still adopting a cautious stance.
This also means that the 1,550 level on the FBM KLCI remains under threat amid the continuing selling pressure. Below the 1,550 level, the supports are the 1,540-1,546 levels, followed by 1,533 points – which would be the key index’s lowest level in three months.
On the upside, the hurdles are at 1,555 and 1,562 points respectively.
Malacca Securities Research
The FBM KLCI extended Friday’s decline amid widespread sell-off.
In view of the tightening monetary policy in the US going forward and the COVID-19 restrictions in China, investors may remain cautious over the near term; selling pressure could continue on the regional stock exchanges as well as on the local front.
Closer to home, investors will be monitoring on the Bank Negara Malaysia’s (BNM) interest rate decision and statements on the economic growth outlook scheduled on Wednesday.
Meanwhile, both the crude palm oil (CPO) and crude oil prices dropped, hovering around RM6,300/metric tonne and US$105/barrel respectively.
The FBM KLCI tumbled for the third consecutive session, closing beneath the SMA100 level and its immediate support at 1,550. Technical indicators remained negative as the MACD Histogram has extended a negative bar while the RSI hovered below the 50 level.
The next support is located around 1,505 while the resistance is pegged at 1,570-1,580. – May 10, 2022
