KUALA LUMPUR (Aug 3): The FBM KLCI is seen drifting lower Friday tracking the overnight losses at mot global markets on worries of an escalation in the trade dispute between the U.S. and China, with immediate support at 1,760.
An intensifying trade dispute between the United States and China weighed on global stocks and bond yields on Thursday, but a rise in Apple shares took its valuation above a record $1 trillion and helped major U.S. indexes close in positive territory, according to Reuters.
In midday trading, Apple Inc became the first publicly traded company with a market capitalization exceeding $1 trillion. That led a rebound in technology stocks that helped key U.S. indexes pare earlier losses to turn positive, it said.
On Wall Street, the Dow Jones Industrial Average fell 7.66 points, or 0.03 percent, to 25,326.16, the S&P 500 gained 13.86 points, or 0.49 percent, to 2,827.22 and the Nasdaq Composite added 95.40 points, or 1.24 percent, to 7,802.69, said Reuters.
AllianceDBS Research in its evening edition Thursday said despite the day’s high up close at 1,788.31 in the preceding day, the FBM KLCI had on Aug 2 tested the 1,788.31 level as market participants decided not to stage a follow through buying pressure.
It said in the absence of stronger buying interest, the benchmark index was in the red throughout most of the trading sessions before settling near the day’s low at 1,778.13 (down 10.18 points or 0.57%).
“In the broader market, losers outnumbered gainers with 658 stocks ending lower and 246 stocks finishing higher. That gave a market breadth of 0.37 indicating the bears were in control,” it said.
AllianceDBS Research said having chalked up about 126 points in the past 18 days, the market did not make a higher high on Aug 2 with the benchmark index only touching previous day’s high of 1,788.31.
It said the non-higher high on Aug 2 did not come as a surprise because recent market run up from the low of 1,662 (July 9) to the high of 1,788.31 (Aug 1) has been over extended to the upside.
“The settlement of 1,788.31 in the last few minutes buying of selective blue chip stocks on Aug 1 may have placed the market in a good position to trade higher again in the next day (Aug 2), but many market participants apparently were not convinced of this 1,788 resistance crossover on Aug 1.
“Instead of buying further into the market, those market participants with winning trades decided to take advantage of the higher market to lock in a portion of their profit.
“This pushed the benchmark index down 1,775.85,” it said.
The research house said following the down close on Aug 2, there should be selling attempt with immediate support at 1,760.
“The analysis of overall market action on Aug 2 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,775.85 level on Aug 3,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies in focus Friday may include: Fraser & Neave Holdings Bhd (F&N), Omesti Bhd, Toyo Ink Group Bhd, Kronologi Asia Bhd, Scomi Group Bhd and Unisem (M) Bhd.