KUALA LUMPUR (Nov 10): The FBM KLCI is expected to follow through with its uptrend today and eye the 1,750-point level but hover sideways in line with the overnight declines at most global markets.
Broad equity market declines in Asia and Europe on Thursday, combined with growing concerns that the Republican-led U.S. corporate tax cut may not pass this year, spoiled the longest winning streak for MSCI's global stock index since 2003, according to Reuters.
Wall Street stocks extended losses, pushing down the benchmark S&P 500 Index as much as 1 percent, after Republican Senator Bill Cassidy, a member of the U.S. Senate Finance Committee, said the Senate tax proposal will delay a corporate tax cut by one year to 2019. Major stock indexes came off their session lows after Senator John Cornyn said Senate Republicans were looking to avoid such a delay, yet remained in the red, it said.
The Dow Jones Industrial Average fell 101.42 points, or 0.43 percent, to end at 23,461.94, the S&P 500 lost 9.76 points, or 0.38 percent, to 2,584.62 and the Nasdaq Composite dropped 39.07 points, or 0.58 percent, to 6,750.05, said Reuters.
AllianceDBS Research in its evening edition Thursday said the FBM KLCI had on Nov 9 traded lower to 1,742.32 as some market participants continued to play on the selling side in anticipation of a lower market.
However, it said non-follow through selling pressure in the area of 1,742.32 prompted supportive buying interest to chip in.
The research house said this lifted the benchmark index to 1,749.31 before settling at 1,746.81 (up 2.61 points or 0.15%).
“In the broader market, gainers outnumbered losers with 431 stocks ending higher and 428 stocks finishing lower. That gave a market breadth of 1.01 indicating the bulls were in control with bears closely matched,” it said.
AllianceDBS Research said having closed near the day’s low in the previous day, the market saw follow through selling pressure on Nov 9.
“However, the benchmark index did not go far down after the opening bell with only a day’s low of 1,742.32.
“This suggested that many market participants were unwilling to be aggressive in their selling game for fear of sudden market reversal.
“A closer study of the market behaviour in the last 10 days revealed that a consolidation platform between 1,740 and 1,752 is shaping up with both the buyers and sellers seen waiting for a catalyst to trigger the next market direction,” it said.
The research house said a crossover of 1,752 would see the market gearing towards the next overhead resistance at 1,767.
It said following the up close on Nov 9, there should be buying attempt.
“The analysis of overall market action on Nov 9 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,749.31 level on Nov 10,” said AlllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include the following: Petronas Chemicals Bhd, Zecon Bhd, Tien Wah Press Holdings Bhd, Malayan Flour Mills Bhd, Hong Leong Industries Bhd, S P Setia Bhd, Malaysia Smelting Corp Bhd, Gas Malaysia Bhd, Asia Bioenergy Technologies Bhd, and My E.G. Services Bhd.