BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The prevailing market softness yesterday left the FBM KLCI below the 1,600 support as profit taking activities were quick to set in due to the rising COVID-19 cases regionally that also affected the performances of their respective equity markets.
Glove maker stocks, however, bucked the dour trend and gained ground, but the broader market and lower liners remained mixed-to-lower with market interest also still moderate.
We maintain our view that the market environment is insipid in the absence of notable leads to sustain investors’ interest.
As a result, we think fresh buying will still be elusive and this could leave the FBM KLCI to drift for the time being with the downside bias still taking hold.
The unabated pandemic conditions are also likely to leave sentiments wary as the prospects for a firmer economic recovery is now clouded.
This could also affect the upcoming corporate earnings performances and leave their current valuations on the expensive side.
Therefore, we think the key index could be range-bound between its immediate support of 1,590 and the psychological 1,600 resistance in the near term as market players await for a clearer market direction.
Beyond these levels, the other support is at 1,580 points, while the 1,615 level is the hurdle further ahead.
Malacca Securities Research
The FBM KLCI mirrored the regional weakness to dip below the 1,600 level, but the glove counters finished in the positive region following the release of Kossan Rubber Industries Bhd’s remarkable results, thus bucking the market downtrend.
However, the sector may see some pullback due to concerns over glove’s average selling prices (ASPs) on the back of the ongoing COVID-19 vaccination programme.
Meanwhile, crude palm oil (CPO) prices continue to hover near the RM4,000 level, but positive impact was not reflected on the plantation counters.
Tracking the overnight gains on Wall Street, the local bourse may see some mild rebound.
The FBM KLCI retreated to close below the 1,600 level due to mounting concerns over the rising COVID-19 confirmed cases.
Technical indicators turned mixed as the MACD Histogram has turned into a red bar, while the RSI was hovering above the 50 level.
We expect the key index to move within the resistance envisaged along 1,615-1,635, with the support set at 1,545-1,565. – April 22, 2021
