BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities continue to lose ground as it ended at the week’s low last Friday (June 11) with plantation stocks seeing quick profit taking actions while healthcare stocks dipped again as the country’s inoculation process picks up pace to send the key index lower.
The lack of fresh impetuses also saw most lower liners and broader market shares remaining dour as market breadth became negative. There was little change to the total traded volumes as it remained on the lower side.
We view market conditions as still largely uncertain following the extension of existing lockdown conditions until this month-end.
Undoubtedly, both the economic and corporate earnings performances for 2Q 2021 will be affected and this could further undermine the equity market’s near-term performance.
As such, we think that insipid conditions could prolong with market players continuing to stay on the sidelines for the time being, awaiting for further clarity on the market’s direction.
In the interim, the key index is likely to drift with the downside bias to prevail amid the lack of fresh buying impetuses and a breach below the 1,580 level could further cloud the near-term prospects.
The supports are now lowered to the 1,570 and 1,563 levels respectively with the 1,580-1,583 levels being the immediate hurdle, followed by 1,590 points.
Malacca Securities Research
The FBM KLCI retreated for the third straight session amid mixed regional sentiment as the key index succumbed to the extended profit taking activities.
We reckon that sentiment to remain tilted towards the downside following the extension of Full Movement Control Order (FMCO) until 28th June 2021 as new daily Covid-19 cases stayed above the 5,000 level.
Meanwhile, investors may focus on the upcoming Federal Open Market Committee (FOMC) meeting, as well as the daily number of vaccination doses administered in the country.
Commodities-wise, crude palm oil (CPO) price may see some buying interest following recent pullback.
The FBM KLCI finished the week lower as the key index closed below the SMA200 level. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI hovered marginally below the 50 level.
The key index may be subject to downside risks with support set at 1,555-1,565, while the resistance is envisaged around 1,600-1,620. – June 14, 2021
