KUALA LUMPUR (Sept 21): The FBM KLCI is expected to extend its losses today in line with the mixed overnight close at Wall Street and European market, with support pegged at 1,766.

U.S. Treasury yields and the dollar gained on Wednesday after the Federal Reserve signaled it expects one more U.S. interest rate hike by the end of the year, according to Reuters.

Both the Dow and S&P 500 fell following the Fed statement but reversed those losses to end the session slightly higher and add to a string of closing records, it said.

The Dow Jones Industrial Average rose 41.79 points, or 0.19 percent, to end at 22,412.59, the S&P 500 gained 1.59 points, or 0.06 percent, to 2,508.24 and the Nasdaq Composite dropped 5.28 points, or 0.08 percent, to 6,456.04, it said.

Meanwhile, the pan-European FTSEurofirst 300 index lost 0.09 percent. MSCI's gauge of stocks across the globe gained 0.14 percent and hit another record high, said Reuters.

AllianceDBS Research said that dampened by the down close in the preceding day, the FBM KLCI had on Sept 20 traded lower on 1,770.44 as market participants continued to play on the selling side in anticipation of a lower market.

It said under the persistent selling pressure, the benchmark index was in the red throughout the trading sessions before settling near the day’s low at 1,773.58 (down 3.08 points or 0.17%).

“In the broader market, losers outnumbered gainers with 476 stocks ending lower and 377 stocks finishing higher. That gave a market breadth of 0.79 indicating the bears were in better control,” it said.

AllianceDBS Research said the market saw follow through selling interest on Sept 20 with the benchmark index falling below the 1,776 support.

“The selling pressure was so overwhelming that the positive opening level on Sept 20 failed to hold the market above the 1,776 level.

“As the market pierced through the 1,776 level, market participants who missed the selling opportunity above 1,776 felt the pressure to liquidate another portion of their stock positions.

“This selling activity subsequently pushed the benchmark index to trade down to a low of 1,770.44,” it said.

The research house said following the down close on Sept 20, there should thus be selling attempt again with support pegged at 1,766.      

“The analysis of overall market action on Sept 20 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,770.44 level on Sept 21,” said AllianceDBS Research. 

Based on the corporate announcements and news flow yesterday, stocks in focus today may include: Daya Materials Bhd, Econpile Holdings Bhd, PPB Group Bhd, YFG Bhd, Lotte Chemical Titan Holding Bhd, Hock Seng Lee Bhd, AHB Holdings Bhd, Berjaya Sports Toto Bhd, Datasonic Holdings Bhd and Hai-O Enterprise Bhd.