KUALA LUMPUR (June 19): The FBM KLCI is expected to extend its positive run today on sustained buying momentum, but gains are seen limited given the mixed close at most global markets last Friday.
U.S. stocks ended little changed on Friday, though Amazon.com's deal to buy upscale grocer Whole Foods Market pressured a wide range of companies including Wal-Mart, while the dollar and U.S. Treasury yields dipped after disappointing economic data, according to Reuters.
Energy shares offset the declines in consumer names, with the S&P energy index rising 1.7 percent and oil prices ending higher on the day, it said.
The Dow Jones Industrial Average was up 24.38 points, or 0.11 percent, to end at 21,384.28, the S&P 500 added 0.69 point, or 0.03 percent, to 2,433.15 and the Nasdaq Composite dropped 13.74 points, or 0.22 percent, to 6,151.76, said Reuters.
MSCI's index of stock markets across the world rose 0.3 percent, while European shares added 0.6 percent, rebounding from recent losses, it said.
AllianceDBS Research in its evening edition last Friday said the FBM KLCI had on June 16 traded lower to 1,787.84.
However, it said buying interest chipped in to lend a supportive hand.
The research house said this lifted the benchmark index to settle off the day’s low at 1,791.31 (up 1.30 points or 0.07%) ahead of weekend.
“In the broader market, losers outnumbered gainers with 525 stocks ending lower and 359 stocks finishing higher. That gave a market breadth of 0.68 indicating the bears were in control,” it said.
AllianceDBS Research said the lower low on June 16 was not a surprise given the down close in the previous day.
However, it said the benchmark index did not go far down with only a day’s low of 1,787.84.
“This suggested that market participants were unwilling to be aggressive on the selling side for fear of a sudden turnaround.
“With the benchmark index registering an up close in one day followed by a down close in the next day in the last few days, many market participants apparently were still uncertain of which way this market will go next, and they continued to wait patiently,” it said.
The research house said a preliminary analysis of recent market movement indicated that there would be a higher chance of seeing an upside breakout.
It said following the up close on June 16, there should be buying attempt again.
“The analysis of overall market action on June 16 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,796.75 level on June 19,” said AllianceDBS Research.
Based on corporate announcements and news flow last Friday, stocks in focus on today may include Eastern & Oriental Bhd, Fajarbaru Builder Group Bhd, Anzo Holdings Bhd, Boustead Holdings Bhd, Hengyuan Refining Company Bhd, Top Glove Corp Bhd, Rev Asia Bhd and NetX Holdings Bhd.