MARKET REVIEW

Global. Asian markets ended lower as investors worried about the upheaval in Turkish Lira and prolonged lockdowns in Europe fuel economic slowdown. Sentiment was also dampened by the western sanctions against China and Beijing hit back immediately with broad punitive measures against the EU. Despite supportive remarks from Powell and Yellen that accommodate monetary policy stance will prevail and the rise in price pressures this year will likely be a "one-off, fears of fresh lockdowns in Europe muddied the outlook for global economic growth, souring investor appetite for cyclical stocks. The Dow and S&P 500 tumbled 0.9% and 0.8% whilst the Nasdaq 100 slid 1.1%.

Malaysia. Tracking negative regional markets, KLCI tumbled 21.5 pts to 1595 to register its 3rd consecutive losses, triggered by heavy profit taking consolidations in the recovery sectors i.e. banking, telco, plantation and gaming stocks. Market breadth turned bearish for a 3rd session as the G/L ratio decline to 0.37 as 860 losers thumped 315 gainers whilst trading volume fell 0.6bn to 7bn shares valued at RM4n. The local institutional (+RM115m; 5D: -RM30m) and retailers (+RM99m; 5D: +RM378m) were the net buyers whilst the foreign (-RM214m; 5D: -RM345m) investors intensified the selling for a 3rd session.

TECHNICAL OUTLOOK: KLCI

Following a 32.7-pt slide in three days and a bearish breakdown below key 1600-1618 supports coupled with bearish overnight close on Wall St, downside risks for KLCI has intensified in the short term with crucial supports near 1568 (200D SMA)–1557-1545 territory. Stiff resistances are situated at 1600-1618-1635 levels.

MARKET OUTLOOK

Bursa Malaysia is poised to open weaker following overnight slump on Wall St amid growing Covid-19 curbs in Europe due to slow rollout of vaccines as well as mutating virus. Following the bearish 1600-1618 supports breakdown, KLCI is envisaged to retest lower floors near 200D SMA (1568) and 1557 (3M low) levels whilst stiff resistances are situated at 1600-1618-1635 levels.

VIRTUAL PORTFOLIO POSITION-FIG1

In the wake of the market volatility, we decided to square off our virtual portfolio stocks i.e. CSCSTEL (4.2% gain), TEXCYCL (3.4% loss) and WILLOW (7.2% gain) on 23 Mar.

Source: Hong Leong Investment Bank Research - 24 Mar 2021