KUALA LUMPUR (March 29): The FBM KLCI is likely to start on a weaker footing today immediate support at 1,851, in line with the overnight dip at Wall Street as major technology stocks dragged investor sentiment lower.
Stocks stumbled again on Wednesday as jitters about major technology and internet companies pushed investors toward their first quarterly fall in equity markets in two years, according to Reuters.
Amazon.com Inc, Netflix Inc and Apple Inc , once market leaders, mutated into an albatross just one day after concerns about other technology names sent stocks down sharply, it said.
The Dow Jones Industrial Average fell 9.29 points, or 0.04 percent, to 23,848.42, the S&P 500 lost 7.62 points, or 0.29 percent, to 2,605 and the Nasdaq Composite dropped 59.58 points, or 0.85 percent, to 6,949.23, said Reuters.
AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on March 28 traded lower to 1,855.12 as market participants chose to play on the selling side in anticipation of lower market.
It said in the absence of stronger buying interest, the benchmark index was in the red throughout the trading sessions before settling at 1,857.87 (down 4.58 points or 0.25%).
“In the broader market, losers outnumbered gainers with 651 stocks ending lower and 251 stocks finishing higher. That gave a market breadth of 0.38 indicating the bears were in control,” it said.
AllianceDBS Research said the market saw selling activity on March 28 with the benchmark index falling to a low of 1,855.12.
It said this showed that market participants were unwilling to play an aggressive buying game despite the up close on March 27.
“A close look at how the recent market carried itself revealed market participants were actually choosing to follow the flows of market to trade after taking cues from the external market development.
“In other word, these market participants were not rigid in their trading game, and they knew the importance of being flexible in order to survive as no one can be right all the time,” it said.
The research house said following the down close on March 28, there should be selling attempt with immediate support at 1,851.
It said a fall below 1,851 would put pressure on the market to test the recent low of 1,838 on March 16.
“The analysis of overall market action on March 28 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,855.12 level on March 29,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include the following: S P Setia Bhd, Tenaga Nasional Bhd, Astro Malaysia Holdings Bhd, VS Industry Bhd, PUC Bhd, Media Chinese International Ltd, DKLS Industries Bhd, Priceworth International Bhd, Titijaya Land Bhd, Cuscapi Bhd, Sapura Energy Bhd, OCK Group Bhd and EA Technique (M) Sdn Bhd.