Thursday 28 Mar 2024
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KUALA LUMPUR (July 31): The FBM KLCI is expected to extend its losses today, in line with the retreat at most global markets last Friday, with immediate support at 1,761.

Stock markets fell worldwide on Friday as results from some big U.S. companies disappointed and tobacco shares dropped, while oil prices had their biggest weekly percentage rise this year, according to Reuters.

Altria Group fell 9.5 percent and was the biggest drag on the S&P 500, while U.S.-listed shares of British American Tobacco dropped 7 percent, after the U.S. Food and Drug Administration said it aims to reduce nicotine levels in cigarettes while exploring measures to shift smokers towards e-cigarettes, it said.

The Dow Jones Industrial Average rose 33.76 points, or 0.15 percent, to close at 21,830.31, the S&P 500 lost 3.32 points, or 0.13 percent, to 2,472.1 and the Nasdaq Composite dropped 7.51 points, or 0.12 percent, to 6,374.68, according to Reuters

AllianceDBS Research in its evening edition last Friday said the FBM KLCI had on July 28 traded marginally higher to 1,772.30 as some market participants continued to play on the buying side in anticipation of a higher market.

However, it said weak follow through buying interest in the area of 1,772.30 prompted pre-weekend profit taking activity to kick in.

The research house said this pushed the benchmark index down to settle at the day’s low of 1,767.08 (down 2.99 points or 0.17%).

“In the broader market, losers outnumbered gainers with 495 stocks ending lower and 335 stocks finishing higher. That gave a market breadth of 0.67 indicating the bears were in better control,” it said.

AllianceDBS Research said the market made a higher high on July 28 with the benchmark index crossing over the 1,771 hurdle again to reach a day’s high of 1,772.30.

“Like what we saw on July 27, market participants were still seen unwilling to play a more aggressive buying game in spite of the 1,771 crossover.

“A closer study of the market pattern revealed that there were indeed concerns of market reversal because the emotion after this upside breakout of 1,771 could end suddenly in the absence of solid positive market catalyst.

“If this were to happen, those market participants that had bought into the market in expectation of further advances may choose to sell at a loss when they cannot profit from a higher market,” it said.

The research house said following the down close on July 28, there should be selling attempt with immediate support at 1,761 and overhead resistance remains at 1,771. 

“The analysis of overall market action on July 28 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,767.08 level on July 31,” said AllianceDBS Research.

Based on corporate announcements and news flow last Friday, stocks in focus today may include: Sime Darby Bhd, XOX Bhd, Pos Malaysia Bhd, Tropicana Corp Bhd, Berjaya Assets Bhd, 7-Eleven Malaysia Holdings Bhd, Kronologi Asia Bhd, EcoFirst Consolidated Bhd, Fajarbaru Builder Group Bhd, Focus Dynamics Group Bhd and Orion IXL Bhd.

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