KUALA LUMPUR (Jan 11): The FBM KLCI is expected to hover around the 1,800-point level today with oil and gas-related stocks seen in focus as crude oil prices settled at above the US$69 per barrel level.
Major government bond yields hit multi-month highs and world stock indexes fell on Wednesday following a report that Chinese officials have recommended slowing or halting purchases of U.S. government bonds, according to Reuters.
The yield on 10-year U.S. Treasury hit a 10-month high, while the dollar slumped against a basket of currencies following the Bloomberg News report, it said.
The Dow Jones Industrial Average fell 52.2 points, or 0.21 percent, to 25,333.6, the S&P 500 lost 6.67 points, or 0.24 percent, to 2,744.62 and the Nasdaq Composite dropped 32.02 points, or 0.45 percent, to 7,131.56, said Reuters.
Meanwhile, Brent crude futures settled at $69.20 a barrel, up 38 cents. The session high for the global benchmark was $69.37, highest since May 2015, it said.
AllianceDBS Research in its evening edition Wednesday said despite the near day’s low down close in the preceding day, the FBM KLCI had on Jan 10 traded lower to 1,821.27 as market participants continued to play on the selling side in anticipation of a lower market.
It said under the persistent selling interest, the benchmark index was in the red throughout most of the trading sessions before settling near the day’s low at 1,822.92 (down 4.02 points or 0.22%).
“In the broader market, losers outnumbered gainers with 630 stocks ending lower and 426 stocks finishing higher. That gave a market breadth of 0.67 indicating the bears were in better control,” it said.
AllianceDBS Research said the market made a lower low on Jan 10.
“A buying attempt was initiated by some market participants on the opening bell, but the benchmark index did not go far up with only a day’s high of 1,830.63.
“The non-follow through buying pressure in the area of 1,830.63 saw the emergence of renewed selling interest which caused the benchmark index to fall back below 1,830.
“This showed that market participants were unwilling to be aggressive in the buying game due to the current high risk and low reward market setup after chalking up 107 points gain in 13 market days measuring from the low of 1,732 (Dec 19) to the high of 1,840.35 (Jan 9),” it said.
The research house said that in fact, many market participants with winning stock positions quickly took advantage of the market rise to exit some of their trades on Jan 9.
Moreover, it said 1,830 – 1,867 was viewed as a supply zone.
The research house said following the down close Jan 10, there should be selling attempt again with immediate support at 1,813.
It said a fall below 1,813 would put pressure on the benchmark index down to the subsequent support level at 1,800.
“The analysis of overall market action on Jan 10 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,821.27 level on Jan 11,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies in focus today may include: AirAsia Bhd, LPI Capital Bhd, AYER Holdings Bhd, Vertice Bhd, Ewein Bhd, Goldis Bhd, IGB Corp Bhd, Tan Chong Motor Holdings Bhd, Accsoft Technology Bhd, Tiger Synergy Bhd, My E.G. Services Bhd and Malaysia Airports Holdings Bhd.