BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Foreign institutional support emerged to allow the key index to climb back above the 1,550 level as they offset the heavy selling of local institutions yesterday.
The bargain hunting on banking and telco stocks also helped to halt the streak of steep falls and allowed the key index to stay above its critical 200-day moving average.
However, many lower liners and broader market shares retreated, resulting in market breadth remaining decidedly negative while traded volumes stayed on the low side.
Although the key index managed to stay above its critical support level, the immediate market outlook remains challenging with inflationary and growth concerns still enveloping sentiments.
Market players will also await Bank Negara Malaysia’s (BNM) interest rate decision today as well as the country’s 1Q 2022 gross domestic product (GDP) data later in the week to gauge the country’s economic prospects, hence leaving market conditions guarded for the time being.
Therefore, there will still be sustained volatility over the near term as low buying interest is unlikely to provide much lift to the market albeit there should be still pockets of institutional support to keep the FBM KLCI around the 1,550 level.
Below that, support is pegged at 1,546 and 1,540 points while the hurdles are at 1,563 and 1,570 points respectively.
Malacca Securities Research
The FBM KLCI bucked the downtrend in the regional markets following the three straight session of decline, mainly powered by bargain hunting in telecommunication and selected banking heavyweights.
We foresee investors to continue to buy the dip ahead of the earnings season but overall market sentiment may be tested by concerns over (i) impact of cukai makmur (windfall tax); (ii) mixed performances on Wall Street overnight, and (iii) the upcoming BNM’s interest rate decision.
Commodities-wise, both crude palm oil (CPO) and crude oil price hovered around RM6,300/metric tonne and US$102/barrel respectively.
The FBM KLCI improved above the SMA200 level, snapping its three-session decline in a volatile trade. Technical indicators remained negative as the MACD Histogram has extended a negative bar while the RSI hovered below the 50 level.
The support is pegged at 1,505 while the resistance is envisaged around 1,570-1,580. – May 11, 2022
