Capturing some decent trends outside of Glove Stocks

The FBM KLCI settled in red in tandem with the regional peers as selling pressure in the glove stocks returned, offsetting the gains on the banking heavyweights following the unchanged Overnight Policy Rate (OPR) by Bank Negara Malaysia. Tracking the losses on Wall Street overnight, we expect the local bourse may continue to consolidate further as market players are likely to trade on a cautious tone on the broader market. Nevertheless, we expect traders to position themselves for the recovery theme as Covid-19 vaccination is taking place. Meanwhile, the Brent oil price has surged firmly above USD65.

Bargain hunting activities emerged on the glove counters after more than one week of pullback, lifting the FBM KLCI and the healthcare sector higher. Market will be looking forward to the second Monetary Policy Committee meeting today to gauge market movements. However, economists anticipate an unchanged stance on the Overnight Policy Rate (OPR) amid expectation of an economic recovery. We believe the lower liners will continue to remain upbeat if the positive market sentiment persists. Meanwhile, the Brent oil price has seen a rebound.

Bucking the downturn across the regional markets, the FBM KLCI ended modestly higher as continued selling in glove heavyweights were offset by buying support in IHH and selected banking heavyweights. We believe the local bourse should trade in an upward bias tone following the change of MCO status for Selangor, Johor, Penang and KL. Meanwhile, the number of Covid-19 confirmed cases daily has dropped to year-to-date low. However, note that the negative sentiment on Wall Street overnight could cap the upside potential on the local front.