Tuesday 19 Mar 2024
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KUALA LUMPUR (March 20): The FBM KLCI is expected to drift sideways today, in line with the weaker overnight close at most global markets, with immediate support seen at 1,834 points.

U.S. stocks joined a broad decline in global equity markets on Monday as traders turned cautious ahead of the Federal Reserve's policy meeting this week and amid continuing concerns about the threat of a global trade war. At the same time, shares of Facebook Inc shed nearly 7 percent after reports that a political consultancy that worked on U.S. President Donald Trump's 2016 campaign gained inappropriate access to data on 50 million of the social network's users. That decline dragged other technology stocks, which have led the market higher over the last two years, according to Reuters.

"If they start to decay, then it may leave investors wondering what's left to become the new leader to resume the bulls' advance," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia, it said.

The Dow Jones Industrial Average fell as much as 425 during the session and ended won 335.60 points, or 1.35 percent, at 24,610.91. The S&P 500 index lost 39.09 points, or 1.42 percent, to 2,712.92 and the tech-heavy Nasdaq Composite index dropped 155.07 points, or 1.8 percent, to 7,334.24, said Reuters.

AllianceDBS Research in its evening edition Monday said the FBM KLCI had on March 19 traded within last Friday’s range to form an inside day bar as market participants chose to be conservative in their game play.

It said in the absence of stronger buying or selling interest, the benchmark index was moving between the red and green zones throughout the trading sessions before settling at 1,847.94 (up 1.55 points or 0.08%).

“In the broader market, losers outnumbered gainers with 574 stocks ending lower and 332 stocks finishing higher. That gave a market breadth of 0.57 indicating the bears were in better control,” it said.

AllianceDBS Research said the market formed an insider bar on March 19 with both the buyers and sellers seen in a balanced position.

“Market participants apparently were unwilling to be aggressive in their game play at this juncture for fear of sudden market reversal.

“A buying decision was not made simply because there was no perceived benefit on an immediate basis given the absence of catalyst to trigger an up move.

“While the market may have appeared to be in a stable condition, many market participants did not want to get excited about the potential market risk to avoid losses,” it said.  

The research house said a preliminary study of the way this market carried itself over the past 2 days revealed that market participants were believed to be waiting for the benchmark index to bounce out of the 1,855 level decisively before committing a buying decision.

It said following the up close on March 19, there should be buying attempt with immediate support at 1,834.

“The analysis of overall market action on March 19 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,850.16 level on March 20,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies in focus today may include: Eco World International Bhd, George Kent (Malaysia) Bhd, YTL Power International Bhd, YKGI Holdings Bhd, TRC Synergy Bhd, Lafarge Malaysia Bhd, Leweko Resources Bhd, Cabnet Holdings Bhd, Tenaga Nasional Bhd, Willowglen MSC Bhd, Parkson Holdings Bhd, Poh Huat Resources Bhd and Malaysian Resources Corp Bhd.

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