Friday 29 Mar 2024
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KUALA LUMPUR (Aug 14): The FBM KLCI is expected to start the week on a lacklustre note today immediate support at 1,760, as sentiment at the local market is seen as still being negative with the selldown last Friday.

Wall Street put a floor under global equities on Friday after a weak inflation reading brought investors back into U.S. stocks even as tensions between the United States and North Korea continued to escalate, though that tension still drove safe-haven buying of gold and the yen, according to Reuters.

A small rise in a measure of U.S. consumer prices pointed to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year, which would be favorable to equity investors, it said.

The Dow Jones Industrial Average rose 14.31 points, or 0.07 percent, to end at 21,858.32, the S&P 500 gained 3.11 points, or 0.13 percent, to 2,441.32 and the Nasdaq Composite added 39.68 points, or 0.64 percent, to 6,256.56, said Reuters.

AllianceDBS Research in its evening edition last Friday said the FBM KLCI had on Aug 11 opened the day on a negative note.

It said the benchmark index subsequently fell below the 1,770 level to settle at the day’s low of 1,766.96 (down 10.81 points or 0.61%) as market participants chose to play on the selling side in anticipation of a lower market.

“In the broader market, losers outnumbered gainers with 826 stocks ending lower and 148 stocks finishing higher. That gave a market breadth of 0.17 indicating the bears were in control,” it said.

AllianceDBS Research said the market saw selling activity on Aug 11 with the benchmark index falling below the 1,770 level.

“Unlike the previous 2 days, market participants decided to play a more aggressive selling game on Aug 11 as the general feeling for a lower market began to impact their thinking.

“So, as soon as the last buying order at 1,775.34 was filled, those sellers who did not get their selling orders done chose to chase the next available buying orders in line.

“This pushed the market to down to a low of 1,766.96,” it said.

The research house said given the magnitude of the market fall, many market participants are now believed to be wondering whether today’s sell-off (Aug 11) is just a dip or the beginning of a bear market.

It said in a preliminary study of the market pattern, what is being seen presently is likely to be more of a dip because the decline from the high of 1,782.32 has not gone below the previous low of 1,750.

It said a break of 1,750 will confirm the significance of the sell-off.

The research house said following the down close on Aug 11, there should be selling attempt again with immediate support at 1,760.

“The analysis of overall market action on Aug 11 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,766.96 level on Aug 14,” said AllianceDBS Research.

Based on corporate announcements and news flow today, stocks in focus on Monday (Aug 14) may include the following: Serba Dinamik Holdings Bhd, Petronas Chemicals Group Bhd, Trive Property Group Bhd, MRCB-Quill REIT, Sime Darby Bhd, Sunway Bhd, Samchem Holdings Bhd, Bumi Armada Bhd, and Pos Malaysia Bhd.

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