BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI mounted a firm recovery in the first trading day of May to surge past the 1,420 level with fresh buying support from local institutions on many of the key index constituents.
Banking stocks saw bargain hunting after their recent pullback but conditions in the broader market were still largely muted with the ACE Market and Small Cap indices in the red. Gaining stocks were marginally ahead of losers as traded volumes improved to near the 3 billion shares mark.
Although yesterday’s up-moves on the FBM KLCI are welcomed, mild profit taking may emerge as market players await for Bank Negara Malaysia’s (BNM) interest rate decision where the rate is tipped to remain at 2.75% for the time being albeit the US Federal Reserve is likely to set higher rates.
Market conditions could also turn choppier following the overnight weakness in key global indices on renewed concerns over the US banking sector.
As a result, there could be more tentativeness that could deter the key index from heading higher, hence it may linger around the 1,420 for the time being. In the interim, there is support at the 1,422 level while below the 1,420 level, the other support is at 1,417 points.
On the upside, the hurdles are at the 1,428-1,430 levels, followed by the 1,435 level.
Malacca Securities Research
The FBM KLCI staged a rebound after recovering from the morning session’s losses as buying momentum kicked in after investors digested the sales of First Republic Bank.
Nevertheless, sentiment is likely to remain cautious amid persisted worries over the ong-oing turmoil in the US banking sector and ahead of the US Fed’s interest rate decision.
Commodities-wise, Brent crude plunged towards US$75/barrel as fears over economic slowdown weighed on prices. Crude palm oil (CPO) price hovered above RM3,400/metric tonne while gold price climbed above USD2,000/ounce.
The FBM KLCI advanced to close above its daily EMA20 but remained below its daily EMA60. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI hovered below 50.
Resistance is set along 1,440-1,450 while the support is located around 1,400-1,410. – May 3, 2023
