Thursday 28 Mar 2024
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KUALA LUMPUR (May 30): Investor sentiment at the local market is likely to be rattled today following the decision of the Pakatan Harapan government to nix the US$110 billion High Speed Rail (HSR) project linking Kuala Lumpur and Singapore which is likely to have a knock on effect on stocks previously linked with the job.

Among the most obvious ones are Malaysian Resources Corp Bhd, Gamuda Bhd while land owners in Seremban (Matrix Concepts Holdings Bhd) and Iskandar (UEM Sunrise Bhd and Sunway Bhd) may also face the brunt of the decision announced by Prime Minister Tun Dr Maahathir Mohamad on Monday.

Also among the other likely victims are building materials and steel makers.

A spiraling Italian political crisis provoked a global stock market sell-off on Tuesday, cut the euro to a 10-month low and spiked borrowing costs for the government in Rome, according to Reuters.

Investors fear that repeat elections - which now seem likely in the euro zone's third-largest economy as soon as July - may become a de-facto referendum on Italian membership of the currency bloc and the country's role in the European Union, it said.

The Dow Jones Industrial Average fell 391.64 points, or 1.58 percent, to 24,361.45, the S&P 500 lost 31.47 points, or 1.16 percent, to 2,689.86 and the Nasdaq Composite dropped 37.26 points, or 0.5 percent, to 7,396.59, said Reuters.

AllianceDBS Research in its evening edition Monday said despite last Friday’s up close, the FBM KLCI had on May 28 opened the day on a negative note. The benchmark index subsequently fell to a low of 1,774.40 as market participants continued to play on selling side.

It said under the persistent selling interest, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,775.84 (down 21.56 points or 1.20%).

“In the broader market, losers outnumbered gainers with 600 stocks ending lower and 360 stocks finishing higher. That gave a market breadth of 0.60 indicating the bears were in better control,” it said.

AllianceDBS Research said the market made a lower low on May 28 with the benchmark index falling to a low of 1,774.40.

It said market participants apparently were more willing to play a selling game given a choice to trade the market.

“The inability on the part of the benchmark index to go above last Friday’s high of 1,797.81 soon after the opening bell on May 28 somehow created a concern among the market participants.

“As the market declined further, the concern for the market turned into fear of more selling pressure coming into play.

“This kind of negative thought was not without reason after the recent sell off which had forced many market participants to cut their losses short or liquidated their stock positions in an attempt to conserve capital,” it said.

The research house said following the down close on May 28, there should be selling attempt with immediate support at 1,768.

It said a fall below 1,768 would put pressure on the market to test the next support at 1,750.

“The analysis of overall market action on May 28 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,774.40 level on May 30,” said AllianceDBS Research.

Based on corporate announcements and news flow on Monday, other stocks in focus today may include the following: Malayan Banking Bhd, Pos Malaysia Bhd, MMC Corp Bhd, YTL Corp Bhd, Kerjaya Prospek Group Bhd, Felda Global Ventures Holdings Bhd, Malaysia Building Society Bhd, UEM Sunrise Bhd, CCM Duopharma Biotech Bhd, Harrisons Holdings (Malaysia) Bhd, Allianz Malaysia Bhd, Gas Malaysia Bhd, Supermax Corp Bhd, Lay Hong Bhd, Hibiscus Petroleum Bhd, Tiong Nam Logistics Holdings Bhd, Hap Seng Plantations Holdings Bhd, Muda Holdings Bhd, Ewein Bhd and Tropicana Corp Bhd.

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