BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities remained on the downside yesterday and slipped below the psychological 1,600 level as selling and profit taking activities dominated trades.
Market conditions were mostly negative with few available leads to turn the tide and losers continue to overwhelm gaining stocks as selling escalated.
Glove stocks were the big losers, but the construction index emerged as the big winner for the day.
There is no change to the immediate market view which will remain pressured by the bouts of selling.
As it is, sentiments are still cautious due to the on-going inflationary concerns with many countries reporting rates that are at multi-year highs, and this is raising the prospects of higher interest rates ahead to combat the high prices that could also slow the global economic growth.
Meanwhile, the weakness in key global equity markets overnight will also continue to weigh on the FBM KLCI’s near term performance and is leaving the downside bias intact over the near term.
The market’s consolidation could send the key index back to the 1,587-1,590 support levels before the 1,580-level support comes into play. On the upside, the immediate resistance is the 1,600 level, followed by the 1,605 level.
Malacca Securities Research
The FBM KLCI skidded below 1,600 in tandem with the negative sentiment across the regional markets after Wall Street overnight’s movements and foreign investors turned net seller for the session.
Given the higher-than-expected US CPI (consumer price index) data, we expect volatility to persist with investors likely to focus on accelerated inflation rate which may trigger a more hawkish tone from the Federal Reserve going forward on its monetary policies.
On the commodity markets, Brent crude price bounced higher, trading around US$105/barrel while crude palm oil futures (FCPO) price hovered above RM6,100/metric tonne on the back of easing COVID-19 conditions in China.
The FBM KLCI extended its losses, slipping below the key 1,600 level and its daily EMA9. Technical indicators were positive but weakening as the Histogram trended lower albeit still hovering above the zero line while the RSI is threading above 50.
Resistance is set at 1,600-1,620 while the support is located around 1,580. – April 13, 2022
