KUALA LUMPUR (July 27): The FBM KLCI is seen trending sideways today with immediate support at 1,761, as sentiment at the local market remains bearish despite the firmer overnight close at Wall Street.
The dollar turned lower while U.S. stocks stayed higher on Wednesday after the Federal Reserve signaled it could begin to cut its massive bond portfolio "relatively soon," according to Reuters.
U.S. Treasury yields fell to a session low after briefly rising following the statement, it said.
The U.S. central bank, which also kept its benchmark lending rate in a target range of 1.00 to 1.25 percent, said it was continuing the slow path of monetary tightening that has lifted benchmark U.S. interest rates by a percentage point since 2015, it said.
The Dow Jones Industrial Average was up 109.03 points, or 0.5 percent, to 21,722.46, the S&P 500 had gained 2.88 points, or 0.12 percent, to 2,480.01 and the Nasdaq Composite had added 9.86 points, or 0.15 percent, to 6,422.03, said Reuters.
AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on July 26 traded to a high of 1,766.70 after a positive opening bell.
However, it said weak follow through buying interest in the area of 1,766.70 prompted renewed selling interest to chip in. This pushed the benchmark index down to 1,760.82 before rebounding to settle at 1,766.0 (up 2.66 points or 0.15%) in the last few minutes buying of selective blue chip stocks.
“In the broader market, losers outnumbered gainers with 431 stocks ending lower and 375 stocks finishing higher. That gave a market breadth of 0.87 indicating the bears were in better control,” it said.
AllianceDBS Research said the market made a higher high again on July 26 with the benchmark index reaching a high of 1,766.70.
“Like what we saw on July 25, the market had on July 26 also opened the day on a positive note before selling pressure pushing it down to a low of 1,760.82.
“The way this market carried itself in these 2 days may have revealed the reluctance on the part of market participants to play an aggressive buying game in the vicinity of 1,766 (5 points away from the 1,771 hurdle), but it had also showed that market participants were unwilling to play an aggressive selling game in the area of 1,761.
“The demand and supply basically appeared to be in a balanced position, but there were footprints of accumulation left behind by the big market players,” it said.
The research house said following the last few minutes buying of selective blue chip stock to settle the market near the day’s high on July 26, the should be buying attempt again with immediate support at 1,761.
“The analysis of overall market action on July 26 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,760.82 level on July 27,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: Top Glove Corp Bhd, Bursa Malaysia Bhd, Gadang Holdings Bhd, Heineken Malaysia Bhd, SC Estate Builder Bhd, ECS ICT Bhd, LBS Bina Group Bhd, Mieco Chipboard Bhd, SYF Resources Bhd, Sunsuria Bhd, Luxchem Corp Bhd, Pantech Group Holdings Bhd and Sasbadi Holdings Bhd.