BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There were more selling on the FBM KLCI as it slipped below the 1,480-support level at the start of the week that also bucked the uptrend on many regional bourses.
Glove makers were the big losers, but lower liners and broader market shares continue to make headway, riding on the renewed buying interest from retail players that saw traded volumes jump to nearly 4 billion shares for the day.
Their gains also helped market breadth to stay on the positive side.
We continue to see the near-term conditions on the FBM KLCI remaining unsettled as there are still hesitation – particularly from foreign funds – on the US Federal Reserve’s interest rate direction as well as stability of the new government.
As it is, the Fed is widely expected to raise interest rates next week albeit at a more gradual pace and this could still keep market players cautious, hence resulting in the FBM KLCI drifting further.
Market players are also awaiting the start of the new Parliament term to commence later in the month and to see whether Prime Minister Datuk Seri Anwar Ibrahim will secure the vote of confidence.
With the key index now at the 1,470 support level, a break of this level could see it veer to the next supports at 1,467 points or lower to the 1,460 level. There is an interim resistance at 1,476 points before the 1,480 level comes into play.
Malacca Securities Research
The FBM KLCI declined further as investors deployed a “sell on news” strategy following the formation of new cabinet.
With the sentiment turning negative on Wall Street, we expect more profit taking activities to emerge on the local front, especially in the technology sector.
Nevertheless, we believe the downside risk could be limited with investors eyeing for the 10 new COVID-19 easing measures to be announced by China on Wednesday (Dec 7).
Back home, the market will be awaiting announcement from the Agriculture and Food Security Ministry regarding the new mechanism to control egg prices.
Commodities-wise, Brent crude price fell to the US$83/barrel level while crude palm oil (CPO) price hovered above RM3,950/metric tonne.
The FBM KLCI slid further to close below its daily EMA9 level. Technical indicators turned mixed as the MACD Histogram plotted a negative bar while the RSI is hovering above 50.
Support is envisaged along 1,450-1,460 while the resistance is set at 1,500-1,510. – Dec 6, 2022
