KUALA LUMPUR (Nov 9): The FBM KLCI is seen consolidating today between 1,740 and 1,752, in line with the mixed overnight close at most global markets.
Increasing concern that U.S. Republicans' plans to cut corporate taxes may not win congressional approval as early as expected weighed on American stock indexes on Wednesday, overshadowing strong economic data in Asia that sent the MSCI All World Index to a record high, according to Reuters.
The dollar edged lower against a basket of currencies , while European shares dipped, led by a broad decline in bank stocks, it said.
The Dow Jones Industrial Average rose 9.27 points, or 0.04 percent, to 23,566.5, the S&P 500 gained 2.56 points, or 0.10 percent, to 2,593.2 and the Nasdaq Composite added 14.81 points, or 0.22 percent, to 6,782.59, said Reuters.
AllianceDBS Research in its evening edition Wednesday said despite the strong up close in the preceding day, the FBM KLCI had on Nov 8 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through buying interest.
It said in the absence of stronger buying pressure, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,744.20 (down 6.74 points or 0.38%).
“In the broader market, losers outnumbered gainers with 481 stocks ending lower and 367 stocks finishing higher. That gave a market breadth of 0.76 indicating the bears were in better control,” it said.
AllianceDBS Research said the market saw no immediate follow through buying interest on Nov 8 with both buyers and sellers in a balanced position.
“This can be seen from the inside day bar formation.
“The run up on Nov 7 was indeed encouraging; however, it was only part of the whole market movement because more willing buyers are needed in order to see a much higher market level.
“Nonetheless, the market setup on Nov 7 should help to strengthen the consolidation platform between 1,740 and 1,752,” it said.
The research house said a crossover of 1,752 would see the market gearing towards the next overhead resistance level at 1,767.
It said following the down close on Nov 8, there should be selling attempt.
“The analysis of overall market action on Nov 8 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,744.09 level on Nov 9,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies in focus today may include: Fraser & Neave Holdings Bhd, Mah Sing Group Bhd, Red Ideas Holdings Bhd, RHB Bank Bhd, LBS Bina Group Bhd, Goh Ban Huat Bhd, Malaysian Pacific Industries Bhd, UEM Edgenta Bhd, Eco World International Bhd and Sime Darby Bhd.