BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong Investment Bank Research
In tandem with the buoyant Wall Street performance overnight, the FBM KLCI may continue the technical rebound today amid bargain hunting activities on bashed down recovery and glove stocks, supported by the positive hammer candlestick formation.
Nevertheless, any rebound is likely to be capped near 1,600-1,607 levels as market sentiment will remain jittery during this May reporting season amid worries over low vaccine supplies and economic impact from a prolonged movement control order (MCO) due to the gravity of the local COVID-19 situation.
Moreover, more Fed officials are warning that current surging asset prices are posing increasing threats to the financial system, triggering potential correction should risk appetite fall.
Malacca Securities Research
The FBM KLCI closed with modest gains after paring the morning session losses, but gains were capped by the weakness in index-linked glove counters amid softer glove average selling price (ASP) expectation and market talks over windfall tax on glove companies.
Meanwhile, Bank Negara Malaysia (BNM) kept the overnight policy rate (OPR) unchanged at 1.75% which suggests that Malaysia’s economic outlook may be neutral to upward bias despite the resurgence of COVID-19 cases as well as the implementation of MCO 3.0.
In the US, however, jobless claims fell more than forecast as market condition improved following the economy reopen.
Commodities-wise, copper price has risen above US$10,000 while crude palm oil (CPO) price has surged above RM4,200.
The FBM KLCI snapped a four-session losing streak to close at intraday high.
Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI was hovering below the 50 level.
The upward momentum may be capped around 1,600-1,620, while the support is located 1,555-1,565. – May 7, 2021
