What to expect on Bursa Malaysia today

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Quick profit taking activities on glove maker stocks and the lack of follow through buying saw the key index falling again yesterday.

The sustained support on banking stocks, however, cushioned the downside and allowed the key index to stay above the 1,580 level at the close.

Conditions elsewhere were also tepid with profit taking activities dominating trades, resulting in many of the lower liners pulling back with market breadth turning negative and volumes slipping below 10 billion shares again.

The end of the week could see further consolidation, in our view, coming after the weakness in global equities overnight and the lack of domestic catalysts that is likely to keep market conditions guarded.

The rising US bond yields is dampening sentiments for equities and with few signs of the yields pulling back, the global equity market condition is set to remain cautious for the time being and this would also permeate to Bursa Malaysia stocks over the near term.

In addition, the buying interest is also waning as more players retreat to the sidelines that is exacerbating the already cautious stance.

As such, we see the 1,580-support level under threat again and if it gives way, the support is lowered to the 1,570 level. On the other hand, the hurdles remain at the 1,590 and 1,600 points levels.

Malacca Securities Research

The FBM KLCI settled in red in tandem with the regional peers as selling pressure in the glove stocks returned, offsetting the gains on the banking heavyweights following the unchanged Overnight Policy Rate (OPR) by Bank Negara Malaysia.

Tracking the losses on Wall Street overnight, we expect the local bourse may continue to consolidate further as market players are likely to trade on a cautious tone on the broader market.

Nevertheless, we expect traders to position themselves for the recovery theme as COVID-19 vaccination is taking place.

Meanwhile, the Brent oil price has surged firmly above US$65.

The FBM KLCI has seen a pullback, snapping its two-day gains. Technical indicators remained mixed as the MACD Histogram extended another green bar, but the RSI is hovering below 50.

Further consolidation might take place with support level pegged at 1,550 and resistance at 1,600-1,620 over the near term. – March 5, 2021

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