Easing In Restrictions In China Should Boost Sentiment in Recovery Themed Stocks

The easing of restrictions in China should boost the sentiment in recovery-themed stocks, Malacca Securities said in a note.

It said that traders are expected to continue focusing on the O&G sector on the back of firmer Brent oil price.

The stockbroking firm said that it expects investors to reassess the corporate earnings and reposition on solid companies as it was heading into the final day of reporting season.

It said that buying support should emerge within the technology and recovery themed sectors. Nevertheless, Malacca Securities said that the upside on the broader market may be kept as traders be focusing on the inflationary pressure that may dampen the corporates’ margins.  Commodities-wise, the Brent crude oil is traded above USD120, while CPO is priced around RM6,200-6,300.

On the local bourse, it said that The FBM KLCI (-0.2%) retreated for the first time in 4 days, as quick profit-taking activities emerged in selected oil & gas and plantation heavyweights yesterday. It said that the lower liners, however, turned mixed, while the broader market remained mixed.

On the global markets, Wall Street was closed for the Memorial Day public holiday, while futures markets indicate a higher opening. Both the European and Asia stock markets ended mostly higher, boosted by China’s move to ease key cities’ Covid-19 restrictions.

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