BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities managed to eke out gains in the latter half of the day to end with slight gains and posting a small rebound from the previous day’s sell-down, boosted by strong gains in CIMB and Genting group of companies.
Market breadth turned positive, albeit just ahead of losers for the day, while volumes improved by some 40% from a day earlier on mild bargain hunting that also saw many of the lower liners and broader market indices turning positive for the day.
Despite the lingering uncertainties over the latest lockdown on the country’s economic and corporate earnings outlook, the near term selling seems to have dissipated as the potential impact is likely to be milder, unlike the previous full lockdown, as more industries are allowed to operate.
As such, we think the FBM KLCI is likely to be on a holding pattern for now as market players await for further clarity on the market’s direction.
We also think that mild bargain hunting activities are likely to continue and help to mitigate some of the selling and the FBM KLCI is likely to trend within a narrow range between the 1,580 and 1,595 levels for the time being.
The other support and resistance levels are at 1,575 and the psychological 1,600 points respectively.
Malacca Securities Research
The FBM KLCI staged a mild rebound on the first day of full lockdown as investors were anticipating that the vaccination drive could boost the appetite for recovery theme stocks, restoring some optimism in selected heavyweights.
Meanwhile, traders may rotate into technology stocks as we believe the consolidation phase might be at the tail-end after stabilising over the past two weeks.
Commodities-wise, crude palm oil (CPO) price extended its losses, but oil price has crossed above the US$70 level.
The FBM KLCI finished higher after heavy sell-down yesterday, recouping all its intraday losses in the afternoon trading session.
Technical indicators remained mixed as the MACD Histogram has turned into a green bar, while the RSI was hovering below the 50 level.
We reckon the index should trade within 1,580-1,600 over the near term; support is set at 1,555-1,565; while resistance is envisaged around 1,600. – June 2, 2021
