BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Market conditions stayed dour at the start of the week with the FBM KLCI index keeping pace with the weakness of global equities to slip to its lowest level in nearly two years.
Selling dominated the key index’s trend with all 30 constituents ending the day in the red as the global inflationary concerns heightened.
Conditions elsewhere were also grim with many lower liners and broader market shares also seeing intense selling, resulting in losers overwhelming gainers on an 8-to-1 ratio.
With market conditions remaining unsettled and global equities still largely affected by the unrelenting headwinds from rising inflation and interest rates, the downside pressure will remain and is set to leave the FBM KLCI listless over the near term.
There remains a significant move to a flight to safety and this is likely to see the selling persisting over the near term as market players continue to take a more cautious stance.
Selling pressure is expected to exacerbate the already fragile sentiments and could also send more market players to the sidelines until there is clarity on its direction.
With selling looking to persist, the support is lowered to 1,460 points followed by the 1,450 level. The hurdles, on the other hand, are at 1,470 and 1,480 points respectively.
Malacca Securities Research
The FBM KLCI plunged below its 52-week low in tandem with regional peers, shaken by worries that the hot inflation will drag the economy into recession.
We have seen net foreign selling continued to increase (five-day cumulative net foreign selling: RM600.1 mil).
Given the significant sell-off overnight on Wall Street, we believe there might be another selling wave prior to the US Federal Open Market Committee (FOMC) meeting, eventually impacting the local bourse negatively for the session.
Brent crude price sustained above the US$120/barrel mark amid inflationary environment while crude palm oil (CPO) is trading around RM5,800/metric tonne.
The FBM KLCI tumbled below its 52-week low after breaking several supports in the past weeks. Technical indicators remained negative as the MACD Histogram has extended another negative bar while crossing below 30.
As the immediate support at 1,475 was broken, the next support is pegged at 1,450 while the resistance is located along 1,500-1,530. – June 14, 2022
