KLCI seen opening lower following sell off on Wall Street

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KUALA LUMPUR (Jan 29): The FBM KLCI is seen opening lower today on the back of the overnight slump at Wall Street.

U.S. bond prices rallied, with the 30-year yield hitting a record low on Wednesday as investors bet U.S. rate hikes were less likely to start soon after the Federal Reserve said inflation was running below forecasts, according to Reuters.

U.S. stocks, after spending most of the session higher, reversed course and fell, with the S&P 500 ending more than 1 percent lower. The dollar strengthened, it said.

AllianceDBS Research in its evening edition Wednesday said that despite the up close in the preceding day, the FBM KLCI had on Jan 28 traded within previous day’s range to form an inside day bar after opening on a weak note as market participants decided not to stage a follow through buying support.

The research house said in the absence of stronger buying interest, the benchmark index kept its position in the red throughout trading sessions before settling at 1,795.88 (- 7.29 , - 0.40%).

“In the broader market, losers outnumbered gainers with 440 stocks ending lower and 340 stocks finishing higher. That gave a market breadth of 0.77 indicating the bears were in control,” it said.

AllianceDBS Research said the market saw 2 inside day bars in the last 4 market days.

It said this implied a cautious game play.

It said while supportive buying interest were observed in 3 out of the recent 4 market days, the market participants were seen waiting for positive catalysts to trigger the next wave of buying momentum to break the 1,810 hurdle on the upside.

The research house said the immediate support was at 1,787.

It said a downside violation of 1,787 would put pressure on the market down to the subsequent support zone, 1760 – 1,770.

Indicator wise, the MACD is above the 9-day moving average line, it said.

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

“As such, the FBM KLCI would likely trade below the 1,790.02 level on Jan 29,” said AllianceDBS Research.