BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index lost further ground last Friday to slip back below the 1,580 level in what was seen as continuing profit taking ahead of the long weekend.
At the same time, the weakness among regional equity indices also weighed on the local stock market sentiments, causing market breadth to stay negative.
Still, the lower liners and broader market shares were largely mixed as some of them found support ahead of the long weekend.
After two consecutive days of pull-back, the FBM KLCI may attempt to find some measure of stability at the start of the week.
This could emanate from potential bargain hunting activities as there appears to be some reprieve from the pandemic conditions with new cases falling over the past few days.
This may provide the impetus for the rebound although we think the gains may still be modest for the time being due to the lingering cautiousness over the market’s near-term direction.
Consequently, we expect the key index to make little headway with the upsides unlikely to be significantly above the immediate hurdle of 1,580 points.
The other resistances are at 1,585 and 1,590 points, while the supports are at the 1,570-1,572 levels and 1,562 points respectively.
Malacca Securities Research
The FBM KLCI finished lower, dragged by pervasive sell-down in glove stocks as healthcare weightage in the FBM KLCI declined after Supermax Corp Bhd was deleted from the key index coupled with the ongoing vaccination programme.
Tracking the sideways tone on Wall Street, investors may stay on the sidelines while monitoring Malaysia’s industrial production index to be released on Friday as well as the European Central Bank’s interest rate decision on Thursday.
Also, we might expect the sentiment to stay weak on technology stocks as US President Joe Biden expands the list of Chinese companies banned from US investment.
Commodities-wise, both the crude palm oil (CPO) and Brent oil prices are seeing mild pullback.
The FBM KLCI extended its losses for the second session as the key index closed below the EMA120 level. Technical indicators turned negative as the MACD Histogram turned into a red bar, while the RSI was hovering below the 50 level.
We expect the key index to consolidate over the near term with resistance located around 1,600-1,620 while the support is set at 1,555-1,565. – June 8, 2021
