BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks retreated yesterday as profit taking emerged following their strong upsides over the past few weeks.
In tandem with the widespread selling in global equities, selling was also precipitous on Bursa Malaysia as sellers overwhelmed gainers on a 3-to-1 ratio that saw the key index closing below the 1,500 level.
Except for the REIT index, all other indices closed in the red with the Technology index being the biggest loser. The selling was also brisk as the day’s volume rose some 20%.
There could be more profit taking ahead given market conditions are pivoting again as there are fewer impetuses to sustain the upsides.
Already, Malaysian equities are deemed to have recovered from its steep falls in 1H 2022 and with global equities also starting to wobble, market conditions are also likely to weaken further and become choppy over the near term.
Although selling may still be present, there could also be bouts of buying support to provide some measure of support and keep the downsides benign for the time being.
As such, the market should be able to find support around the 1,490 level in the near term. Below that, the other support is at 1,480 points. The 1,500 level is the immediate hurdle followed by the 1,505-1,510 levels.
Malacca Securities Research
The FBM KLCI slipped on Tuesday alongside with the regional bourses as profit-taking activities emerged following a negative cue from Wall Street.
The global markets may see an uneven recovery as investors weighed the escalating US-China tension and some hawkish comments from several US Federal Reserve officials that triggered a surge in bond yields as investors priced in more interest rate hike.
Nevertheless, we believe continuous buying from the foreign funds will support the local bourse.
On the commodity markets, Brent crude was traded above US$100/barrel while crude palm oil (CPO) fell below the crucial support of RM4,000/metric tonne.
The FBM KLCI snapped its four-session winning streak as the key index retreated below the psychological 1,500 level. Technical indicators, however, remained positive as the MACD Histogram extended a positive bar while the RSI hovered above 50.
Resistance is at 1,500-1,530 while the support is set along 1,450-1,460. – Aug 3, 2022
