BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Key index stocks retreated yesterday as quick profit taking actions rolled-in to halt some of the market’s recent progress.
Glove maker stocks, in particular, were among the biggest losers amid the fewer catalysts in the sector with recent gainers like banking stocks also succumbing to profit taking action.
Elsewhere, conditions were mixed with market breadth almost equal, but traded volumes dipped again.
The combination of lack of leads and little progress in the domestic pandemic conditions that still remains perilous, could still leave market conditions wary for longer.
Market players are still assessing the impact of the latest lockdown on the country’s economy and corporate earnings despite the availability of specific stimulus measures to cushion some of the effects.
This could also lead to more market players staying on the sidelines until there is further clarity on the market’s outlook.
In the interim, we see the downside of bias, prolonging ahead of the long weekend with the mild selling and profit taking activities likely to continue.
This could result in the FBM KLCI slipping below the 1,590 level to around the 1,585 or 1,580 levels. On the other hand, the 1,600 level remains the immediate hurdle, followed by the 1,606 level.
Malacca Securities Research
The FBM KLCI snapped a two-day gain over the rising COVID-19 cases. Meanwhile, sell-down was noticed in gloves and vaccine-related stocks, pulling the healthcare index down.
Tracking the negative tone from the US stock markets, we expect the local exchange to trade sideways with the lack of fresh catalyst in the market.
On a side note, MR DIY Group (M) Bhd will be replacing Supermax Corp Bhd in the FBM KLCI following the FTSE semi-annual review.
Commodities-wise, we expect mild pullback on crude palm oil (CPO) – tracking the soy bean futures movement – while crude oil has firmly stood above US$70 for now.
The FBM KLCI failed to maintain its upward momentum, retreating near the 1,600 level. Technical indicators are suggesting a mixed sentiment on the key index; the MACD Histogram turned red bar, while the RSI is above the 50 level.
We expect the key index to trade sideways, with resistance located around 1,600-1,620, while the support is set at 1,555-1,565. – June 4, 2021
