Overnight Rally In Nasdaq And Removal Of Poultry Price Caps Should Push KLCI Upward

The poultry sector is likely to gain traction prior to the removal of price caps on chickens and eggs in July 2022 as there is increased trading interest there, Malacca Securities said.

Meanwhile, it said that the overnight rally in Nasdaq should boost further recovery in the technology sector. Also, we believe energy stocks could be traded actively with the rebound in oil price.

The stockbroking house said that it believes crude oil price to remain elevated for the near term on the back of reduced Russian output and larger-than-expected drawdown in the US inventories, thus inflationary pressure may not abate anytime soon.

Both the CPO and Brent crude oil prices were on the rise, with the former trading around RM6,500, while the latter trading above USD117 per barrel.

On the local bourse, it said the FBM KLCI (-0.2%) extended its decline with more than half of the key index constituents closed in the red yesterday. Both the lower liners and the broader market ended mixed with the energy sector (-2.7%) underperformed the latter after crude oil prices skid lower.

On the overseas markets, Wall Street rebounded as the Dow (+1.3%) recovered all its previous session losses in anticipation of softer labour data and that may provide some cushion to the concern over inflationary pressure. The European stock markets ended mostly upbeat, but Asia stock markets closed mostly weaker.

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