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 insipid yesterday, extending the FBM KLCI’s weakness spell on concerns that the Shenzhen lockdowns will affect the supply chain to Malaysian manufacturers.
At the same time, market conditions stayed meek ahead of the US interest rate decision. The lockdown concerns had the most telling effect on the technology index as it tumbled more than 3.0% yesterday with overall market breadth staying negative.
Again, traded volumes remained on the low side.
There could be some near-term reprieve following the overnight rebound on Wall Street that is likely to permeate to local equities.
This will help to temporarily cast aside the ongoing geopolitical and supply chain concerns and allow Malaysian equities to mount a recovery.
The rebound, however, could still be tentative due to on-going uncertain market direction although the prevailing low market participation could also see fresh buying remaining selective for the time being.
Meanwhile, lower commodity prices may leave plantation and oil and gas (O&G) stocks to drift further.
On the upside, the FBM KLCI’s near-term targets are at 1,565 and 1,570 points respectively. The supports, on the other hand, are at the psychological 1,550 points and 1,543 points.
Malacca Securities Research
The FBM KLCI sank further on the back of unresolved conflict between Ukraine and Russia, coupled with the rising COVID-19 cases in China.
However, we believe the strong rebound on Wall Street could spill over to the local front but the normalising commodity prices may weigh on the commodity related stocks.
Meanwhile, the increasing foreign inflows may push the stocks on Bursa Malaysia. At the point of writing, crude oil price has fallen below the US$100/barrel mark while crude palm oil (CPO) price retreated further as investors kept a close watch on Indonesia’s permits addition.
The FBM KLCI is trading below the daily EMA60 and the key index booked losses for the third session. Technical indicator remained negative as the MACD Histogram is still below zero while the RSI hovered below 50.
The resistance is set around 1,570-1,580 while the support is located at 1,550 followed by 1,540. – March 16, 2022
