BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities lost steam again yesterday and surrendered most of its Monday gains as market conditions turned cautious following the US Federal Reserve’s reiteration of sustained interest rate hikes.
This saw quick profit taking emerging and the weakness was in tandem with the mostly weak conditions in regional indices.
The lower liners and broader market had a mixed day, but market breadth turned negative due to the increased selling activities.
The roller-coaster conditions on Bursa Malaysia are likely to continue with the key index poised for a rebound in tune with Wall Street’s gains overnight.
However, market conditions could remain cautious for the most part due to the still unsettled market conditions that may preserve the near-term volatility.
Therefore, any rebound could be mild as market players continue to assess the near-term outlook with the lack of domestic leads also leaving market players to look to overseas leads for direction.
On the upside, the immediate target is the 1,490 level, followed by the 1,493-1,495 levels with the psychological 1,500 level still a major hurdle for the time being. The supports, meanwhile, are at the 1,480 and 1,475 levels respectively.
Malacca Securities Research
The FBM KLCI traded lower for the session as investors took profit prior to Jerome Powell’s speech and the US CPI (consumer price index) data later this week.
While the expectations of a tighter monetary policy may continue to weigh on market, we believe the local bourse could be on track for further recovery as the re-opening of China’s border will dominate investors’ sentiment over the near term.
Commodities-wise, Brent crude price climbed above US$80/barrel driven by the expectation of strong demand growth following the China’s re-opening. Meanwhile, crude palm oil (CPO) price hovered above RM3,950/metric tonne.
The FBM KLCI digested gains from previous session but remained above its daily EMA9 level. Technical indicators were mixed as the MACD Histogram extended a negative bar while the RSI is hovering above 50.
Resistance is pegged along 1,500-1,510 while support is located at 1,450-1,460. – Jan 11, 2023
