Market Review

Malaysia: After delivering a strong performance on the previous session, the FBM KLCI (-0.02%) closed largely unchanged after dipping mildly into the negative territory at the final trading hour as Genting heavyweights dragged the overall performance of the key index. The lower liners, however, edged higher, while the broader market ended on a mixed note with the healthcare sector (+5.3%) rallying for the ninth straight session.

Global markets: US stockmarkets took another beating as the Dow (-1.4%) erased all its previous session gains following the resurgence of Covid-19 cases could dent the pace of economic recovery moving forward. European stockmarkets extended their losses, but Asia stockmarkets closed mostly higher, fuelled by the rally in Chinese equities.

The Day Ahead

The FBM KLCI has now turned slightly cautious after the recent streak of gains as penny counters took the lead. Given the lack of fresh leads, we see the consolidation to take place as investors continue to monitor on the developments of economic recovery. At the same time, the renewed volatility on Wall Street may also limit any potential gains.

Sector focus: With the number of new Covid-19 cases remain on the rise; we think that the healthcare sector will continue to thrive over the foreseeable future. The technology sector may also continue its fine form with no signs of abating, in line with Nasdaq hitting the all-time-highs recently.

FBMKLCI Technical Outlook

The FBM KLCI has formed a Doji candle after hitting the 1,590 resistance level as profit taking took place in the eleventh trading hour. For now, we see the 1,590 serving as the key resistance, followed by 1,615; the level was recorded during pre Covid-19. Downside risk remains located at 1,550, followed by 1,530. Indicators are still positive as the MACD Histogram has extended another green bar, while the RSI is tethering near the overbought territory

Source: Mplus Research - 10 Jul 2020