BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malaysian stocks retreated at the start of the week following the weakness on Wall Street last Friday even as there was more resolve to the banking failures in the US and Europe.
Despite the pullback, the FBM KLCI managed to remain above the psychological 1,400 level at the close. Except for the healthcare sector, most Bursa Malaysia sector indices retreated, resulting in losers beating gainers by a 2-to-1 margin.
Traded volumes remained above the 3 billion shares mark.
The equity market’s volatility is expected to persist due to the still unsettled market undertone where market players are now awaiting for the US Federal Reserve’s interest rate decision later in the week.
However, with key global equity indices posting a rebound overnight, there could also be a quick rebound on the FBM KLCI as market players could use the calmer market conditions to bargain hunt some of yesterday’s losers.
Such activity could allow the key index to mount a quick bounce and to regain some traction to fortify its position above the psychological 1,400 level. On the way up, there will be resistances at the 1,411 and 1,416 levels respectively while the other support is at 1,397 points.
Malacca Securities Research
The FBM KLCI witnessed an intense sell-off along with its regional peers as investors remained cautious over the banking turmoil in the US and Switzerland.
However, we saw the sentiment improved on Wall Street following the rescue deal for Credit Suisse while investors may shift their focus to the US Fed’s interest rate decision tomorrow (US time).
We believe the local bourse will remain sideways until more clues are given after the conclusion of the Federal Open Market Committee (FOMC) meeting.
Commodities-wise, Brent crude is hovering above US$73/barrel while crude palm oil (CPO) rebounded above RM3,800/metric tonne. Meanwhile, gold prices remained firm above USD1,950/ounce.
The FBM KLCI retreated but managed to close above the key 1,400 level. Technical indicators, however, could be positive biased as the MACD Histogram turned higher despite hovering in the negative region while the RSI is above 30.
Resistance is located around 1,420-1,430 while the support is pegged along 1,370-1,380. – March 21, 2023