BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities succumbed to fresh selling following the implementation of a new lockdown that will last for two weeks (June 1-14).
Expectedly, market breadth was negative with losers twice the number of gaining stocks with many of the lower liners and broader market shares losing ground on a flight to safety.
Nevertheless, the sell-down was relatively mild as total traded volume slipped with foreign participation waning significantly following their portfolio realignment exercises of late.
We see market sentiments remaining morbid for the time being with sentiments affected by the latest lockdown that could pressurise the country’s recovery prospects for the year.
In addition, corporate earnings could also be affected, albeit the impact could be milder due to the shorter lockdown duration.
Amid the prevailing uncertainties, however, we think the downside bias will remain over the near term until there is further clarity on the market’s direction.
Nevertheless, we think the downsides may be cushioned by the additional stimulus support as well as the reduced selling pressure.
This may also mean that the 1,580 level could see some support, but if it gives way, the next support is at the 1,568 level. The hurdles, meanwhile, are at 1,590 and the 1,600 points respectively.
Malacca Securities Research
Bucking the trend in most regional markets, the FBM KLCI kicked off the week on a dour note as market sentiment was dampened by the imposition of full lockdown nationwide amid spiking COVID-19 confirmed cases.
However, we believe market sentiment might be lifted by the PEMERKASA+ stimulus package that was unveiled yesterday prior to the full lockdown.
Meanwhile, investors may see buying interest in essential sectors that are able to operate during the lockdown. Commodities-wise, crude palm oil (CPO) has fallen below the RM4,000 level, while oil price has climbed above US$69.
The FBM KLCI snapped four consecutive sessions of gains to close below the 1,590 level. The MACD Histogram has turned red, while the RSI is below 50.
We reckon the index should trade within 1,580-1,600 over the near term, with support set at 1,555-1,565, while the resistance is envisaged around 1,600. – June 1, 2021
