KUALA LUMPUR (Jan 4): The FBM KLCI is seen defending its gains today with immediate hurdle at 1,800 points, in line with the firmer overnight close at Wall Street.
The U.S. dollar extended gains against key currencies on Wednesday after the release of minutes from last month's Federal Reserve meeting, while world shares smashed records on investor optimism in the new year, according to Reuters.
The dollar index rose 0.33 percent, with the euro down 0.36 percent to $1.2013, it said.
The Dow Jones Industrial Average rose 63.51 points, or 0.26 percent, to 24,887.52, the S&P 500 gained 14.59 points, or 0.54 percent, to 2,710.4 and the Nasdaq Composite added 53.77 points, or 0.77 percent, to 7,060.67, said Reuters.
AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on Jan 3 opened the day with an upside gap as market participants rushed to establish stock positions in anticipation of a higher market.
It said under the persistent buying interest, the benchmark index reached a high of 1,795.87 before settling at 1,792.79 (up 10.09 points or 0.57%).
“In the broader market, gainers outnumbered losers with 771 stocks ending higher and 305 stocks finishing lower. That gave a market breadth of 2.52 indicating the bulls were in control,” it said.
AllianceDBS Research said the market made a higher high with the benchmark index shooting above the 1,790 level to reach a high of 1,795.87 on Jan 3.
“The upside gap indicated the urgency on the part of market participants to acquire stocks.
“As soon as the last selling order was filled at 1,785.21, those aggressive buyers that missed the buying opportunity at 1,785.21 decided to chase the next available sellers in line.
“This pulled the market up when the buying demand began to outpace the selling supply,” it said.
The research house said the buying interest was so overwhelming that the benchmark index held its position firm above the 1,790 level throughout most of the trading sessions with high market volume activity.
It said this had propelled the market nearer to re-test its recent high of 1,796.81 registered on Dec 29, 2017.
It said following the up close on Jan 3, there should be buying attempt again with immediate hurdle at 1,800.
It said a crossover of 1,800 would see the market gearing towards the next resistance zone, 1,823 – 1,830.
“The analysis of overall market action on Jan 3 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,795.87 level on Jan 4,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies in focus today may include Wah Seong Corp Bhd, Westports Holdings Bhd, Kerjaya Prospek Group Bhd, TDM Bhd, Selangor Dredging Bhd, My EG Services Bhd and Aturmaju Resources Bhd.