KUALA LUMPUR (June 14): The FBM KLCI is expected to remain lacklustre today, as market sentiment could stay tepid with sellers dominating trade despite the firmer overnight close at most global bourses.
World stock markets rose on Tuesday as technology shares recovered from a recent sell-off while short-dated U.S. bond yields briefly hit multi-week highs ahead of an anticipated interest rate increase from the Federal Reserve, according to Reuters.
The S&P 500, Dow industrials and Russell 2000 set record closing highs. The S&P technology index ended up 0.9 percent after a two-session selloff that put the spotlight on areas of the stock market where valuations appear stretched, it said.
The Dow Jones Industrial Average was up 92.8 points, or 0.44 percent, to close at 21,328.47, the S&P 500 gained 10.96 points, or 0.45 percent, to 2,440.35 and the Nasdaq Composite added 44.90 points, or 0.73 percent, to 6,220.37, said Reuters.
The pan-European STOXX 600 ended up 0.6 percent, while MSCI's gauge of stocks across the globe was up 0.5 percent, it said.
AllianceDBS Research in its evening edition Tuesday said the FBM KLCI had on June 13 traded to a high of 1,793.01 as market participants continued to play on the buying side in anticipation of a higher market.
However, it said weak follow through buying support in the area of 1,793.01 prompted profit taking activity to chip in.
The research house said this pushed the benchmark index down to 1,784.31 before settling near the day’s low at 1,784.44 (down 4.45 points or 0.25%).
“In the broader market, losers outnumbered gainers with 557 stocks ending lower and 349 stocks finishing higher. That gave a market breadth of 0.62 indicating the bears were in control,” it said.
AllianceDBS Research said the market saw follow through buying interest on June 13 with the benchmark index rose to a high of 1,793.01.
“Market participants may have been seen willing to play on the buying side, but they are not prepared for a more aggressive buying game at this juncture.
“Judging from the directionless market swing between the red and green zone on June 13, the bulls and bears were engaged in a battle to fight for control of the game throughout the day,” it said.
The research house said following the down close on June 13, there should be selling attempt again with immediate support seen at 1,781.
It said a fall below 1,781 would put pressure on the benchmark index to go down to 1,775.
“The analysis of overall market action on June 13 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,784.31 level on June 14,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: Felda Global Ventures Holdings Bhd, Vivocom International Holdings Bhd, Bermaz Auto Bhd, KPJ Healthcare Bhd, V.S. Industry Bhd, Kimlun Corp Bhd, Hektar Real Estate Investment Trust and PRG Holdings Bhd.