KUALA LUMPUR (July 4): The FBM KLCI is expected to extend its gains today in line witb firmer overnight close at most global markets, with immediate hurdle seen at 1,773.
U.S. and European shares kicked off the new quarter with gains on Monday as talk about interest rate hikes boosted bank stocks, while the dollar edged up from nine-month lows and U.S. Treasury yields hit their highest in more than eight years, according to Reuters.
Oil prices resumed their longest stretch of daily gains in more than five years after data pointed to moderating U.S. crude output, though analysts said news of rising OPEC production could cap the rally, it said.
Meanwhile, it said the S&P 500 index rose after notching its strongest first half-year performance since 2013 in a shorter trading day ahead of Tuesday's Independence Day, a full-day holiday for U.S. financial markets.
The Dow Jones Industrial Average rose 129.64 points, or 0.61 percent, to 21,479.27, the S&P 500 gained 5.6 points, or 0.23 percent, to 2,429.01 and the Nasdaq Composite dropped 30.36 points, or 0.49 percent, to 6,110.06, said Reuters.
AllianceDBS Research in its evening edition Monday said the FBM KLCI had on July 3 formed an inside day bar. In the absence of stronger buying and selling interest, the benchmark index was moving between the green and red zones throughout the trading sessions before settling at the day’s high of 1,768.67 in the last few minutes buying of selective stocks (up 5.00 points or 0.28%).
“In the broader market, losers outnumbered gainers with 448 stocks ending lower and 419 stocks finishing lower. That gave a market breadth of 0.93 indicating the bears were in better control with the bulls closely matched,” it said.
AllianceDBS Research said the downside violation of the 1,770 level on June 30 was viewed as an indication of a negative market development, but market participants apparently were unwilling to play an aggressive selling game in the subsequent market day (3 Jul 2017) for fear of sudden marker reversal.
“A closer look at the chart revealed that there is a market support level at 1,750, so market participants have chosen to be patient in their game play because the immediate potential reward measuring from the day’s low of 1,755 on June 30 to the 1,750 level is not large enough to endorse a selling position,” it said.
The research house said following the up close on July 3, there should be buying attempt again with immediate hurdle at 1,773.
“The analysis of overall market action on July 3 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,768.67 level on July 4,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today may include: Yinson Holdings Bhd, Tiger Synergy Bhd, Chin Hin Group Bhd, Top Glove Corp Bhd, Bina Puri Holdings Bhd, Felda Global Ventures Holdings Bhd, AirAsia Bhd, Mah Sing Group Bhd, ECS ICT Bhd, Alam Maritim Resources Bhd and Texchem Resources Bhd.