BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
The surge in US bond yields resulted in foreign funds to off-loading more Malaysian equities yesterday that also sent the key index to below the 1,600 points level again at the close.
Domestic political concerns also left sentiments weak and despite the buying support from local institutions, the key index stumbled to its lowest level in nearly a month, undoing nearly all of March’s gains.
The selling was overwhelming with losers beating gainers by nearly a 3-to-1 ratio on increased volumes.
We think yesterday’s selling was overdone which was also due in part to the foreign selling that may be part of their end-of-quarter portfolio realignment process.
As such, we think that it could give rise to some quick near-term rebound as bargain hunting may help to smooth out some of yesterday’s losses.
Nevertheless, Malaysian equities were already listless, and we think that the rebound may be piecemeal at best with sentiments still wary over the country’s ongoing political intrigue as well as the lack of corporate leads.
Consequently, we see a measured rebound with the 1,580-1,590 levels serving as the near-term hurdles. Beyond these levels, the other resistance is at the psychological 1,600 points level, while the supports are now pegged at 1,565 and 1,550 points respectively.
Malacca Securities Research
The FBM KLCI tumbled over 2.2% as investment jitters mounted over US bond yields surge and political uncertainties on the local front as well as the healthcare sector succumbing to a downfall on continued selling in glove counters.
However, with the FBM KLCI being steeply oversold, bargain hunting may emerge over the near term, tracking Wall Street overnight gains on technology stocks.
We believe the broader market may recover, but we expect the rebound to be short-lived with traders adopting a selling into strength strategy.
Meanwhile, the crude palm oil (CPO) price rose on solid exports data for March 2021.
The FBM KLCI (-2.2%) slid into the negative region and broke the support at 1,580 support level.
Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI dipped lower for the session.
We believe the key index may perform a technical rebound, with the resistance pegged at 1,600-1,625, while the next support is set around 1,550-1,560. – April 1, 2021