Market Review

Malaysia: The FBM KLCI (+1.6%) remained on the upward trajectory run as the key index stretched its gains to mark the sixth straight winning streak; buoyed by the extended record rally in glove heavyweights share prices, coupled with the positive momentum from selected oil & gas and banking heavyweights. The lower liners also trended higher, while the broader market finished mostly higher.

Global markets: US stockmarkets resume trading in an upbeat manner as the Dow jumped 1.8% as New York city moved to phase 3 of reopening, coupled with the recent batch of stronger-than-expected economic data. Both European and Asia stockmarkets also marched higher with the Chinese equities rallying for the fifth straight session on an influx of trading volume as the country continues to open up.

The Day Ahead

It was another solid performance on the key index with gains in line with regional equities. For now, investors would keep an eye on Bank Negara’s monetary policy decision later in the evening. Although there could be another round of rate cut, we think that the weakness in banking sector may be cushioned by the other sectors that are heavily reliant on debt financing such as the construction, utilities and oil & gas sectors.

Sector focus: While there are no signs of retreat from the healthcare sector, the recent study from Semiconductor Industry Association (SIA) which forecast sales to rise by 3.3% YoY to US426.0bn will continue to anchor gains on technology stocks.

FBMKLCI Technical Outlook

The FBM KLCI extended its winning streak after hovering largely in the positive territory for the entire trading session yesterday. Amid the upbeat momentum, the key index may head towards the next resistance at 1,580, followed by the recent peak at 1,590. Support remains pegged at 1,530 followed by 1,515. Indicators are also still positive as the MACD Histogram has extended another green bar, while the RSI rose into the overbought territory

Market Scorecard

Source: Mplus Research - 7 Jul 2020