BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The FBM KLCI stumbled yesterday, giving up the 1,400 support in the process as selling returned on selected heavyweight stocks to leave the key index at its lowest level in two months.
Banking stocks were the big losers among the key index constituents while in the broader market, healthcare and plantation stocks were the major losers as market breadth remained decidedly negative following a spate of generally below expectation corporate results.
With the key index failing to preserve the psychological 1,400 level, the immediate outlook is looking increasingly fragile, leaving a downside bias trend intact for the time being.
This could see the key index ending the month on a weak note again as market conditions are becoming more insipid with buying interest still thin for the most part.
Although we do not rule out some mild window dressing activities emerging that could allow the key index to re-test the 1,400 level, the lack of buying is likely to keep a lid on any potential upside with the 1,400 level to remain elusive for the time being.
In the meantime, the supports are now at 1,390-1,393 levels which is near the year lows, followed by 1,385 points. Above the 1,400 level, the other hurdles are at 1,402-1,406 levels.
Malacca Securities Research
The FBM KLCI drifted below the key 1,400 level as investors took profit ahead of the passing of US debt ceiling deal.
While global sentiment remained mixed, we believe bargain hunting activities may emerge on the local front in under-valued stocks.
Meanwhile, the renewable energy theme may come into investors’ focus as the government targets to roll out its Energy Transition Roadmap as well as to reveal the renewable energy export guidelines in June.
Commodities-wise, Brent crude tumbled towards US$73/barrel amid uncertainty over global demand prospects while crude palm oil (CPO) price hovered above RM3,350/metric tonne.
The FBM KLCI sank and violated the key 1,400 level after hovering in the negative territory for the entire session. Technical indicators remained negative as the MACD indicators extended a negative bar while the RSI hovered below 50.
Support is pegged along 1,370-1,390 while the resistance is set along 1,440-1,460. – May 31, 2023