KUALA LUMPUR (Sept 19): The FBM KLCI is expected to hover sideways and consolidate between 1,776 and 1,788 today, despite the firmer overnight close at most global markets as local investors' sentiment remains wary.
An index of world stocks hit a record high on Monday and the dollar rose to a more-than seven-week peak against the yen as investors awaited clues from the U.S. Federal Reserve on the timing of further rate hikes, while tensions over North Korea eased, according to Reuters.
On Wall Street, the Dow had a record close for the fifth session in a row while the S&P set a closing record for the second consecutive session, led by gains in financial shares. Rising U.S. Treasury yields boosted financial stocks, with higher interest rates expected to boost bank profits, it said.
In the U.S. stock market, the Dow Jones Industrial Average rose 63.01 points, or 0.28 percent, to 22,331.35, the S&P 500 gained 3.64 points, or 0.15 percent, to 2,503.87 and the Nasdaq Composite added 6.17 points, or 0.1 percent, to 6,454.64, said Reuters.
AllianceDBS Research in its evening edition Monday said the FBM KLCI had on Sept 18 traded down to a low of 1,780.20 after opening the day on a negative note.
It said in the absence of stronger buying interest, the benchmark index was in the red throughout most of the trading sessions before settling at 1,783.66 (down 2.67 points or 0.15%).
“In the broader market, losers outnumbered gainers with 457 stocks ending lower and 406 stocks finishing higher. That gave a market breadth of 0.88 indicating the bears were in better control,” it said.
AllianceDBS Research said having made a lower low for 2 consecutive days, the market registered a higher high on Sept 18. “However, the benchmark index did not go far up with only a day’s high of 1,787.01.
“Market participants apparently were unwilling to be more aggressive in their buying game play for fear of resistance selling as the market was less than 1 point away from the 1,788 hurdle.
“So, the market is expected to consolidate between 1,776 and 1,788 in the coming few days as market participants begin to look at the market environment and the market trend before parting their investible monies,” it said.
The research house said to avoid unnecessary capital tie up, market participants would choose to remain patient, follow the rules and be objective about the market.
It said following the down close on Sept 18, there should be selling attempt again.
“The analysis of overall market action on Sept 18 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,780.20 level on Sept 19,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: Affin Holdings Bhd, Felda Global Ventures Holdings Bhd, T7 Global Bhd, Salcon Bhd, Kerjaya Prospek Group Bhd, Jaycorp Bhd and Matrix Concepts Holdings Bhd.