BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks took a tumble yesterday with sentiments frayed by the Prime Minister hint on not renewing contracts for several government services providers. A sell-down ensued on stocks like MyEG Services Bhd, Datasonic Group Bhd and other government-linked counters.
The selling also extended to the lower liners and broader market shares that left losers overwhelming gainers by more than a 2-to-1 ratio. Also, traded volumes picked up amid the increased selling to over 5 billion shares for the day.
Despite the gains in key global equity markets overnight, Malaysian equities could be slow to pick-up its pace due to the unsettled market conditions with buying interest remaining tepid.
As it is, market players are casting aside the sustained positivity in many of the country’s economic barometers with foreign funds continuing to reduce their stakes in favour of other regional indices.
Under the prevailing environment, the FBM KLCI’s insipid trend is likely to be sustained and any near-term recovery could be mild due to the prevailing low buying interest with market players waiting for 2022’s GDP (gross domestic product) announcement this Friday (Feb 10) and more corporate results to be released.
On the upside, the immediate target is the 1,480 level, followed by the 1,485 level which also corresponds with the 200-day moving average line. The supports, on the other hand, are at 1,470 and 1,463 points respectively.
Malacca Securities Research
The FBM KLCI slipped deeper into the negative territory throughout the session amid renewed selling pressure.
However, we believe bargain hunting activities are likely to emerge following yesterday’s broad-based sell-down in view of the upbeat cue from Wall Street overnight after the US Federa1 Reserve chairman Jerome Powell indicated that the inflation could be subsiding.
Commodities-wise, Brent crude price surged above the US$83/barrel level with the recovering demand from China’s re-opening activities while crude palm oil (CPO) rebounded above RM3,900/metric tonne as the sentiment turned more positive.
Besides, we expect the upcoming reporting season and the re-tabling of Budget 2023 to be on traders’ radar.
The FBM KLCI fell below the SMA200 while EMA9 was attempting to cross below EMA20. Technical indicators turned negative as the MACD Histogram extended a negative bar while the RSI slipped below the 50 level.
Support is monitored along 1,450-1,460 while resistance is pegged around 1,525-1,540. – Feb 8, 2023
