MARKET REVIEW

Global: Despite the White House announced a fiscal stimulus package worth anywhere near USD1 trillion, Asis’s stock markets ended sharply lower as rapid spreading coronavirus continues to cloud investors sentiment. Similarly, European markets and Wall Street declined sharply on the back of rising concerns over the economic fallout from the Covid-19 outbreak (which is still unable to contain at this juncture).

Malaysia: Meanwhile, selling pressure emerged on the local front after the FBM KLCI hit an intra-day high of 1,275.73 pts and eventually fell 1.4% to close at 1,239.01 pts for the session. Market breadth was negative with losers led gainers by a ratio of 7-to-2, accompanied by 3.49bn, worth RM2.87bn. Selected consumer (Nestle and F&N) and utilities (Tenaga and Taliwork) traded actively higher.

TECHNICAL OUTLOOK: KLCI

The FBM KLCI ended softer on Wednesday and the MACD Indicator expanded negatively below the zero level. Both the RSI and Stochastic oscillators are still severely oversold. Resistance is set along 1,280-1,300, while support is pegged around 1,200-1,210.

MARKET OUTLOOK

Given the negative performance on Wall Street on the back of unsettled Covid-19 episode, we anticipate the selling interest may continue to spillover towards stocks on the local front. However, ECB has announced a Pandemic Emergency Purchase Programme worth €750bn to combat the impact of the coronavirus, we think it may see some mild support today on KLCI. The trading range of the FBM KLCI will be located around 1,200-1,300.

Source: Hong Leong Investment Bank Research - 19 Mar 2020