KUALA LUMPUR (Dec 16): The FBM KLCI is likely to hover around the psychologically crucial 1,700-point level today as global markets stumbled on Monday, roiled by falling crude prices.

At the global markets, oil prices slumped to 5-1/2-year lows on Monday, pulling down emerging market assets and boosting demand for the safe-haven yen, while global equity markets fell further after last week's rout amid nagging worries about worldwide growth, according to Reuters.

Stocks retreated as crude oil prices gave up early gains after the Organization of the Petroleum Exporting Countries restated its determination not to cut output despite a global energy glut, it said.

Meanwhile, U.S. stocks ended lower in a volatile session on Monday as oil prices extended their selloff, adding to worries about weak global demand.

The losses follow the S&P 500's worst weekly performance since May 2012. The index is now down 3.4 percent since Dec. 8 but is still up 7.6 percent for the year so far, said Reuters.

AllianceDBS Research in ite evening edition Monday said the FBM KLCI had on Dec 15 gapped down after the opening the bell to break the 1,730 support.

It said the benchmark index subsequently reached the lowest low of 1,695.60 since May 6, 2013 as market participants continued to play on the selling side in anticipation of a lower market.

The research house said that under the sustained selling activity, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,697.31 (- 35.68 , - 2.06%).

“In the broader market, losers outnumbered gainers with 1,010 stocks ending lower and 66 stocks finishing higher. That gave a market breadth of 0.06 indicating the bears were in control,” it said.

AllianceDBS Research said the downside gap created on Dec 15 indicated an imbalance of demand and supply.

It said there was an urgency to unload stock positions due to the looming fear of a further decline.

The research house said the selling pressure on Dec 15 was overwhelming and this could be seen from the concentrated trading activity near the low end of the market range and the downside penetration of the 1,700 psychological level.

It said following the weak down close on Dec 15, the benchmark index was expected to trade lower again with the immediate support seen at 1,670.

It said the overhead resistance zone was pegged between 1,700 and 1,730.

Indicator wise, the MACD is below the 9-day moving average line, it said.

“The analysis of overall market action on Dec 15 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,695.60 level on Dec 16,” said AllianceDBS Research.