BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks moved higher yesterday in what was seen as light bargain hunting due to the slight improvement in sentiments on speculation that the US may trim the tariffs on China-made goods.
However, the upsides were mild as concerns over rising domestic interest rates lingered. Much of the gains were from energy stocks while the broader market and lower liners continued to drift lower amid the lack of interest and market breadth remaining negative.
Market conditions could still remain guarded in the early parts of the session as market players await for Bank Negara Malaysia’s (BNM) interest rate decision with economist expecting another 2.25% hike to tone down inflationary pressure.
In the meantime, oil and gas stocks could endure more volatility following weakness of oil prices albeit banking stocks may stay firm as it could benefit from higher rates.
This could result in the FBM KLCI becoming mixed for the day but could stay broadly in a holding pattern for now as it looks to establish a base after its recent volatility.
The range-bound trend could see the key index staying within the 1,430 and 1,450 levels over the near term as it looks to firm up a base. The interim support and resistance levels are at 1,437 and 1,445 points respectively.
Malacca Securities Research
The FBM KLCI staged a late-day rebound on the back of mild bargain hunting activities.
Nevertheless, we expect investors to stay sidelines amid the heightened inflationary pressure and lack of fresh catalysts environment.
Meanwhile, all eyes will be on the monetary policy meeting and BNM’s interest rate decision today.
Brent crude price plummeted to trade near US$100-US$105/barrel as concerns over recession weighed on price. Meanwhile, crude palm oil (CPO) price tumbled below RM4,100/metric tonne as Indonesian supplies are set to flood the market amid rising export permits.
The FBM KLCI booked marginal gains after a final-hour rebound. Technical indicators remained mixed as the MACD Histogram extended a positive bar while the RSI hovered below 50.
Resistance is located along 1,460-1,480 while the support is set at 1,400-1,420. – July 6, 2022
