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

Stocks remain on the downtrend as selling pressure continues to take a grip on the market with banking and plantation counters pushing the key index lower yesterday – the latter slipping following Sri Lanka’s move to ban palm oil.

Sentiments were further dampened by the reported move of the Chinese Government to curb credit growth.

Most low liners and broader market shares also dipped in relatively thin trading with market breadth remaining negative.

With market condition still looking unsavoury, we see further near-term weakness as fresh buying interest is also insipid, affected by the lack of impetuses.

At the same time, the FBM KLCI has slipped below one of its major supports and this could see selling escalating as more market players may opt to trim some of their shareholding, thus further exacerbating the market’s near-term downtrend.

Fresh buying, on the other hand, will remain reserved amid the fewer compelling thematic plays, albeit there could be some nibbling on glove maker stocks due to their oversold conditions.

Nevertheless, we see the downside bias remaining for the most part with the key index possibly settling below the 1,580 level to around the 1,560-1,570 levels over the near term.

The resistances, meanwhile, are at 1,580 and 1,590 points respectively.

Malacca Securities Research

The FBM KLCI extended its losses for the second straight session after Sri Lanka banned imports of Malaysian palm oil.

However, we expect bargain hunting to emerge in the near term amid higher crude palm oil (CPO) price.

Nevertheless, taking cues from the overnight Wall Street, we expect investors to remain on the sidelines without any significant market leads with the FBM KLCI may continue to trend sideways.

On a side note, the use of e-wallet payment method may pick up at farmer and public markets soon following the implementation of the Retail Digitalisation Initiative (ReDI) framework.

The FBM KLCI has trended lower in line with most regional peers. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI continued to hover below the 50 level.

Without any fresh catalyst, the key index may continue to trade sideways with resistance envisaged around 1,600-1,625, while support is set along 1,550-1,560. – April 7, 2021

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