Market Review

Malaysia: The FBM KLCI (+0.2%) managed to recover its intraday losses mainly spurred by the second trading session gains in Top Glove (5.5%) yesterday. The lower liners marched higher, while the broader market closed mixed with healthcare (+4.8%) and technology (+3.3%) sectors continue to outperform on the back of expectation of worsening pandemic and technology fuelled rally in US.

Global markets: US stockmarkets climbed as the Dow gained 0.6% mainly driven by Apple, coupled with the ongoing negotiation on the stimulus package offsetting the rising US-China tension. European stockmarkets edged higher following the release of July Eurozone PMI, signalling a stronger-than-expected recovery. Asia stockmarkets finished mostly higher driven by gains in tech stocks.

The Day Ahead

Expectedly, market sentiment was stabilised by the bargain hunting activities in selected index heavyweights yesterday. Still, investors are wary ahead of the upcoming batch of quarterly earnings results that kicked off this week. Elsewhere, we see rotational play amongst the lower liners to dominate the market sentiment with trading volumes rising to fresh record high again.

Sector focus: While we reckon that the technology and healthcare sector will continue their upbeat momentum, commodity players under the plantation and energy sector may share some spotlight with CPO prices rising towards RM2,800/MT, while crude oil prices hovers near 5-months high. The breakthrough of US$2,000 on gold prices may also see gold-related players on the move.

FBMKLCI Technical Outlook

The FBM KLCI has formed a hammer candle after recovering all its intraday losses, suggesting for a potential recovery from the two-day pullback. A strong recovery, however, remains premature with 1,600 serving as the immediate resistance, followed by 1,615. The immediate support remains pegged at 1,560, followed by 1,530. Indicators are still weak with the MACD Histogram extended another red bar and remains below the Signal Line, while the RSI is slightly above 50

Market Scorecard

Source: Mplus Research - 5 Aug 2020