BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malaysian stocks rebounded yesterday with bargain hunting returning to lift the FBM KLCI back above the psychological 1,400.
The gains were also largely in tandem with the upsides seen among regional indices that were buoyed by the abating global banking crisis.
While the index heavyweights regained their traction, lower liners dithered and were mixed as the buying was still relatively tepid. As a result, market breadth was still on the negative side for the day.
The key index’s rebound yesterday is welcomed to break its weakness streak although the overall trend is still largely range-bound as it continues to trend within the 1,400-1,415 levels.
It is now dependent on whether there will be sufficient follow-through buying interest to lift the key index past the above threshold that would sustain its upsides.
Failure to do so could leave the key index to continue drifting with the downside bias to also remain. Meanwhile, Bursa Malaysia’s fundamentals is still holding steady with its valuations still below its long-term averages amid the slowing earnings growth prospects for 2023.
However, the attractive valuations are also not encouraging fresh buying as yet with most market players on a wait-and-see stance that could keep the key index subdued for longer. In the interim, there is support at 1,407 points while the 1,420 level is the other resistance.
Malacca Securities Research
The FBM KLCI rebounded above the key 1,400 level after a relief rally on Wall Street amid the First Citizens Bank-Silicon Valley Bank (SVB) deal in the US.
Nevertheless, sentiment seems not recovering as smoothly in the US, hence we expect profit taking activities on the big caps to emerge on the local front.
Meanwhile, investors are shifting their focus on the economic outlook under the elevated interest rate environment.
Commodities-wise, Brent crude prices have rebounded and supported firmly above the US$78/barrel zone while crude palm oil (CPO) traded above RM3,700/metric tonne. Gold price traded above US$1,970/ounce.
The FBM KLCI regained momentum to close above the key 1,400 level. Technical indicators remained mixed as the MACD Histogram extended a positive bar while the RSI hovered below 50.
Resistance is pegged around 1,420-1,440 while support is located at 1,370-1,380. – March 29, 2023