Market Review

Malaysia: The FBM KLCI (+0.9%) started off the second half of the year on a buoyant manner as the key index marched higher for the third straight session, anchored by from glovemakers heavyweights again as certain part of the world reported increase in Covid-19 infections. The positive undertone was also brought about by the IHS Markit Malaysia Manufacturing Purchasing Managers Index (PMI) that rose sharply to 51.0 in June 2020; the highest since September 2018. The lower liners also advanced, while the broader market finished mostly higher led by the healthcare sector (+4.1%).

Global markets: US stockmarkets finished on a mixed note as the Dow fell 0.3%, dragged down by Apple Inc (-0.2%) on the decision the re-close 30 of its retail stores in the US, while the Nasdaq finished at fresh record high level. European stockmarkets chalked in modest losses after rebounding from their intraday lows, while Asia equities edged mostly higher.

The Day Ahead

The FBM KLCI may continue on the recovery path as investors turned slightly optimistic on the recent batch of stronger-than-expected economic data. Should the upcoming batch of economic data, particularly from China (Caixin Services PMI and Caixin Composite PMI) outperform, markets will react accordingly.

Sector focus: Apart from healthcare stocks, we see the technology sector to be on the move with the Nasdaq notching fresh record high level, while the rising Brent oil closing at one-week high may power oil & gas players for today.

FBMKLCI Technical Outlook

The FBM KLCI has gapped up to close above daily EMA9 after recovering all its intraday losses yesterday. With the key index now near the immediate resistance of 1,515, a breakout above the aforementioned level may see the 1,530 resistance being re-tested. Support is now pegged at 1,500 followed by 1,475. Indicators remain mixed as the MACD Histogram has extended another green bar but remains below the Signal Line, while the RSI remains above 50.

Market Scorecard

Source: Mplus Research - 2 Jul 2020