MARKET REVIEW

Global. Tracking Wall St’s retreat, Asian markets skidded amid surging Covid-19 outbreaks worldwide cast a pall over a swift rebound in the global economy due to the possibility of fresh restrictive measures. After a 2-day losing streak, the Dow rallied 316 pts or 0.9% to 34137, as investors resumed bets on economic revival stocks following bullish expectations of 1Q21 results season (S&P 500 earnings is expected to soar 30% YoY), shrugging off a flare-up in global coronavirus cases could jeopardize an economic rebound.

Malaysia. Despite a rebound in glove companies, KLCI tumbled 11 pts to 1596.6 amid mounting worries of a resurgence of Covid-19 infections will check hopes for a sustainable global recovery. Sentiment was mixed as 551 losers edged 501 gainers with 8.7bn shares changed hands valued at RM4.4bn. Local institutions (+RM132m; 44.7% of trading value) and retailers (+RM126m; 40.4% of trading value) were the major net buyers whilst foreigners net sold RM258m shares or 14.9% of trading value (the highest since -RM334m on 31 March).

TECHNICAL OUTLOOK: KLCI

Unless staging a successful breakout above 1613 (sloping trendline from 1696), KLCI is likely to be trapped in sideways consolidation for a while with major supports near 1585- 1576-1564 levels. Only a successful breakout above 1613 will reignite a fresh rally to retest 1620-1635-1646 zones.

MARKET OUTLOOK

Although overnight Wall St rally may provide a fillip to Bursa Malaysia today, KLCI is likely to be stuck in ongoing tug-of-war match, given the Covid-19 pandemic jitters from more infectious strains and the possibility of renewed restrictions on economic activities will dent investors’ optimism about a strong global economic recovery. Major supports are situated at 1585-1575-1564 whilst stiff resistances are near 1613 (downtrend resistance from 1696) and 1620 (high BB) zones.

Source: Hong Leong Investment Bank Research - 22 Apr 2021