Market Review

Malaysia: The FBM KLCI (+0.5%) advanced after recovering all its intraday losses to languish in the positive territory in the final two hours of the trading session on last Friday. Consequently, the key index rose 2.5% WoW. The lower liners also finished higher, while healthcare sector (+4.3%) outperformed the mostly negative broader market.

Global markets: US stockmarkets rebounded as the Dow (+1.4%) re-claimed the 26,000 psychological level after Gilead Sciences reported some positive developments on the clinical-trial data. European stockmarkets also marched higher extended their losses, but Asia stockmarkets was battered with the exception of FBM KLCI.

The Day Ahead

It was another solid performance on the local bourse, largely buoyed by the unprecedented rise in glove heavyweights. Although we reckon that the extended gains to continue, the first parliamentary sitting since the Movement Control Order (MCO) took place may see investors staying on the side-lines; awaiting for further political developments. Nevertheless, the revision of market circuit breaker rules may provide a boost for further strides.

Sector focus: We continue to favour the healthcare sector as a clear winner on the unabated situation of Covid-19. In the meantime, the construction sector may also gain traction should there be no major political changes over the near term.

FBMKLCI Technical Outlook

The FBM KLCI has formed a bullish to breakout above the 1,590 resistance following the swift intraday recovery. We think that the upward bias momentum breakout above the aforementioned level may power the local bourse for further upsides towards 1,600, followed by 1,615. Downside risk remains located at 1,550, followed by 1,530. Indicators are still positive as the MACD Histogram has extended another green bar, but the RSI is slightly overbought.

Market Scorecard

Source: Mplus Research - 13 Jul 2020