BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was no reprieve for stocks on the FBM KLCI as they continued to head south last Friday amid persistent foreign selling and lack of domestic support.
As a result, the key index inched closer to the 1,380-support level despite its already oversold conditions.
However, buying support emerged among the lower liners and broader market shares as they started to recover from their oversold conditions and allowing for market breadth to turn positive for the first time in 10 sessions.
The key index has yet to exhibit signs of a rebound as yet despite the strong upward moves in many global indices that reacted positively to the deal on US debt ceiling.
As it is, foreign selling remains on many key index constituents amid the weaker ringgit and the directionless trading environment albeit the selling pressure looks to be easing.
Therefore, it remains to be seen if a rebound could emerge soon but the easing selling may provide some leeway for bargain hunting to emerge and allow the key index to find support at the 1,380 level for the time being.
If this level also gives way, the support is lowered to the 1,372-1,376 levels. On the upside, the hurdles are at 1,385 and 1,396 points respectively.
Malacca Securities Research
The FBM KLCI remained bearish with selling pressure loomed in banking and selected consumer heavyweights while investors piled into small and mid-cap stocks.
We deem the pullback on Wall Street overnight as a healthy consolidation while the local bourse may track regional markets’ uptrend move with bargain hunting activities emerging.
Investors may monitor Japan’s and Eurozone’s GDP (gross domestic product) as well as China’s inflation rate to gauge the aggressiveness of global interest rate hikes.
Commodities-wise, Brent crude traded above US$76/barrel while crude palm oil (CPO) traded above RM3,350/metric tonne.
The FBM KLCI dipped for the fourth straight session, closing just above the 1,380 level. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI hovered below 50.
Support is located at 1,370 while resistance is envisaged along 1,400-1,440. – June 6, 2023
