What to expect on Bursa Malaysia this Wednesday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Window dressing activities helped the FBM KLCI to post minute gains yesterday after it lingered in the negative territory for most of the day amid the continuing foreign selling that left sentiments indifferent.

Utilities and selected banking stocks were chased up in mild window dressing but the broad market conditions were still lacklustre to leave market breadth decidedly negative. Unsurprisingly, market breadth was still negative with traded volumes remaining moderate.

We see market conditions staying lacklustre over the near term, hampered by the lack of catalyst that would still see most market players adopting a wait-and-see stance.

As a result, the key index is likely to continue drifting with the bouts of selling to persist, particularly from foreign institutional players that are still reducing their shareholding in Malaysian equities.

However, there should also be support from local institutions as the mild window dressing activities continue.

This should help to preserve the FBM KLCI above the 1,380-support level ahead of the mid-year book closing with the immediate hurdle set at the 1,390 level, followed by the 1,395 level. The immediate support is at the 1,380-1,385 levels with the ensuing support at 1,375 points.

Malacca Securities Research

The FBM KLCI staged a marginal rebound on the local bourse after China’s interest rate cut to support economic growth.

We believe the bargain hunting activities may sustain in the near term despite the pullback on Wall Street ahead of the US Federal Reserve chairman’s testimony to Congress as it is fairly oversold on the FBM KLCI.

Nevertheless, the upside might be capped over the near term prior to the state elections that will be held in 3Q 2023.

Commodities-wise, Brent crude traded above US$75/barrel while crude palm oil (CPO) price remained resilient above RM3,700/metric tonne.

The FBM KLCI closed marginally higher above its daily EMA9 level after oscillating between the positive and negative territories. Technical indicators remained mixed as the MACD Histogram extended a positive bar while the RSI is rising towards 50.

Resistance is envisaged along 1,400-1,410 while the support is located around 1,370. – June 21, 2023

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