KUALA LUMPUR (Aug 10): The FBM KLCI is expected to remain lacklustre today given the prevailing tepid sentiment at the local market in the absence of fresh catalysts, with immediate support seen at 1,770.
U.S. President Donald Trump's warning to North Korea and Pyongyang's threat of possible armed retaliation drove investors away from stocks and other risky assets on Wednesday and into textbook safe-havens like gold and Treasuries, according to Reuters.
But despite the largest percentage drop in over a month on a global equities index, U.S. equities ended only slightly lower as healthy corporate earnings and a recent string of strong economic data enticed investors into beaten-down stocks, it said.
The Dow Jones Industrial Average fell 36.64 points, or 0.17 percent, to 22,048.7, the S&P 500 lost 0.9 points, or 0.04 percent, to 2,474.02 and the Nasdaq Composite dropped 18.13 points, or 0.28 percent, to 6,352.33, said Reuters.
AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on Aug 9 opened the day on a negative note to trade within previous day’s range as market participants decided not to stage an immediate follow through buying support.
It said in the absence strong supportive buying interest, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,777.94 (down 3.71 points or 0.21%).
“In the broader market, losers outnumbered gainers with 452 stocks ending lower and 317 stocks finishing higher. That gave a market breadth of 0.70 indicating the bears were in better control,” it said.
AllianceDBS Research said the market saw no follow through buying interest on Aug 9 with the benchmark index falling below the 1,780 level to a low of 1,775.99.
“It was clear that market participants had chosen to be on a conservative side, even though the benchmark index was supposed to be in a good position to trade higher.
“This could be attributed to the fear of a sudden pullback that may occur after the recent higher highs for 6 consecutive days.
“So, the formation of the inside day bar basically indicated a pause in the game play with both the buyers and sellers were seen in a balanced position,” it said.
The research house said following the down close on Aug 9, there should be selling attempt again with immediate support at 1,770.
“The analysis of overall market action on Aug 9 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,775.99 level on Aug 10,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include the following: Telekom Malaysia Bhd, ManagePay Systems Bhd, MISC Bhd, Scientex Bhd, Straits Inter Logistics Bhd, Boustead Heavy Industries Corp Bhd, Minetech Resources Bhd, Cepatwawasan Group Bhd and Reach Energy Bhd.