BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There was no reprieve for Malaysian stocks as conditions remain dour that saw most stocks heading south. Market sentiments and confidence was affected by the re-imposition of the movement control order (MCO 3.0) and coupled with the thinning market participation, market breadth became decidedly negative with losers beating gaining stocks by nearly four-fold.
Technology related stocks were the big losers, in tandem with the weakness in its global counterparts, while banks and plantation stocks were the big losers on the FBM KLCI.
With the market’s sentiment remaining frail and the broadly cautious conditions still taking hold, we see the market’s downside bias continuing in the shortened trading day ahead.
The better-than-expected GDP performance is unlikely to provide much impetus as economic conditions may remain challenging in the current quarter due to the re-imposition of the MCO.
In addition, the weaker performance of key global indices overnight could also weigh and keep market conditions wary for longer.
After the FBM KLCI breached the 1,580 support, the new supports are now lowered to 1,572 and 1,567 points respectively. Apart from 1,580, the other hurdles at the 1,587-1,590 levels.
Malacca Securities Research
The FBM KLCI settled lower in tandem with the regional peers as market sentiment was dampened by nationwide expansion of MCO. Taking cues from the negative Wall Street overnight performance, we expect lacklustre trade on the local bourse ahead of the Aidilfitri holiday.
However, we believe bargain hunting activities may emerge within the energy sector as Brent oil price gained momentum due to the lingering fears of gasoline shortage as North America’s biggest petroleum pipeline was affected for days following the cyberattack.
The FBM KLCI retreated for the second trading session due to persistent selldown in selected heavyweights. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI was hovering below the 50 level.
We expect thin trading on the key index on the half-day trade, with support pegged around 1,555-1,565, while the resistance is set along 1,600-1,620. – May 12, 2021
