KUALA LUMPUR (June 7): The FBM KLCI is expected to extend its gains and stay firmly above the 1,790-point level in sustained buying momentum, as technical indicators remain positive.

Oil prices edged up on Tuesday, bouncing after sliding below $47 a barrel on pressure from a Mideast diplomatic rift, while U.S. Treasury yields and the dollar dropped to recent lows and world stocks dropped as political uncertainty pushed investors away from risky assets, according to Reuters.

The yen and gold gained as caution prevailed and ahead of testimony from the former head of the FBI, a British election and the European Central Bank's next move, which all happen on Thursday, it said.

The Dow Jones Industrial Average fell 47.81 points, or 0.23 percent, to 21,136.23, the S&P 500 lost 6.77 points, or 0.28 percent, to 2,429.33 and the Nasdaq Composite dropped 20.63 points, or 0.33 percent, to 6,275.06, said Reuters.

AllianceDBS Research in its evening edition Tuesday said that supported by the up close in the preceding day, the FBM KLCI had on June 6 overcome the 1,788 hurdle to a high of 1,795 as market participants continue to play on the buying side in anticipation of a higher market.

It said under the persistent supportive buying interest, the benchmark index was in the green throughout most of the trading sessions before settling at 1,791.01 (up 3.06 points or 0.17%).

“In the broader market, losers outnumbered gainers with 547 stocks ending lower and 342 stocks finishing higher. That gave a market breadth of 0.62 indicating the bears were in better control,” it said.

AllianceDBS Research said the market broke the 1,788 hurdle on the upside on June 6 with market participants more willing to play a buying game.

“Because the strong up close on June 5 had placed the market in a good position to advance further in the subsequent day.

“Just looking at the rebound from the day low of 1,783 to the high of 1,795, buyers were seen on the upper hand over the sellers.

“However, a small retreat took place during the closing period as some market participants with winning trades had decided to lock in a portion of their trading gains,” it said.

The research house said following the up close at 1,791.01 on June 6, there should be buying attempt again on June 7 with an eye to test the 1,800 resistance.

“The analysis of overall market action on June 6 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,795 level on June 7,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, stocks in focus today may include: Felda Global Ventures Holdings Bhd, XOX Bhd, Ire-Tex Corp Bhd, CIMB Group Holdings Bhd, Frontken Corp Bhd, Bintai Kinden Corp Bhd, Malaysian Resources Corp Bhd and Chin Hin Group Bhd.