BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The market’s weakness remains unabated with the key index slipping below the 1,580 level yesterday on news of fresh lockdowns in many parts of the country ahead of the Hari Raya celebrations.
Banking stocks were again among the key losers with glove maker stocks close behind amid the prognosis of lower average selling prices (ASPs) ahead.
Plantation stocks also lost significant ground, while the lower liners and broader market shares succumbed to further selling with the day’s losers beating gainers by a wide margin.
Even after successive days of weakness, there are still few signs of a rebound as yet with the overall market outlook dampened by the fresh economic uncertainties over the latest lockdown.
Furthermore, concerns are mounting over the rising domestic COVID-19 cases that may even worsen in the weeks ahead that may result in the prolonging of the restricted movement conditions.
As such, we think that the downside risk remains due to the heightened uncertainties even as we think there could be some inkling of support during this ongoing results reporting season.
With the 1,580-level breached, the support is lowered to the 1,565 and 1,550 levels, while the resistance above the 1,580 level is at 1,590 points.
Malacca Securities Research
The FBM KLCI declined for the fourth consecutive session due to persistent selling pressure from foreign investors with the broader market may further consolidate as concerns over the expansion of MCO (movement control order) 3.0 to several districts in Johor, Perak and Terengganu may dampen buying interest today.
Investors will keep an eye on the overnight policy rate (OPR) announcement by Bank Negara Malaysia (BNM).
On a side note, the government has launched a RM3.5 bil Jaringan Prihatin stimulus package to subsidise data plan subscriptions and mobile device purchases.
Commodities-wise, oil prices have been rising, boosted by higher fuel demand amid easing of lockdowns in the US and parts of Europe during summer.
The FBM KLCI saw a fourth consecutive session decline with the EMA20 line tipping downwards. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI was hovering below the 50 level.
The resistance is pegged along 1,600-1,620, while the support is set around 1,565 followed by 1,555. – May 6, 2021
