KUALA LUMPUR (Jan 22): The FBM KLCI is expected to start the week on a positive note with sustained momentum from last Friday, with immediate support at 1,818.
World equity markets climbed to a record on Friday as the U.S. dollar held near three-year lows and a U.S. government shutdown loomed, while U.S. Treasury yields continued their ascent to hit their highest levels since September 2014, according to Reuters.
Democratic Senate leader Chuck Schumer met with President Donald Trump at the White House to search for ways to avert a U.S. government shutdown, but Schumer said afterward that disagreements remained as the clock ticked toward a midnight deadline to pass a funding bill, it said.
The Dow Jones Industrial Average rose 53.91 points, or 0.21 percent, to 26,071.72, the S&P 500 gained 12.27 points, or 0.44 percent, to 2,810.3 and the Nasdaq Composite added 40.33 points, or 0.55 percent, to 7,336.38, said Reuters.
AllianceDBS Research in its evening edition last Friday said despite the near day’s low down close on Jan 18, the FBM KLCI had on Jan 19 traded within previous day’s range to form an inside day bar as market participants decided not to stage a follow through selling pressure.
It said in the absence of stronger selling interest, the benchmark index kept its position in the green throughout the trading sessions before settling at the day’s high of 1,828.83 (up 7.23 points or 0.40%) in the last few minutes buying of selective blue chip stocks.
“In the broader market, gainers outnumbered losers with 518 stocks ending higher and 446 stocks finishing lower. That gave a market breadth of 1.16 indicating the bulls were in better control,” it said.
AllianceDBS Research said there was no follow through selling pressure on Jan 19.
“Given the weak market settlement on Jan 18, it was indeed a surprise NOT seeing a lower low on Jan 19.
“The positive opening level on Jan 19 somehow had lent a helping hand to halt the market decline, because many market participants were believed to have taken cue from the opening level whether to sell or not.
“An ability on the part of the market to hold its position firm after the opening bell helped to form an inside day bar pattern which indicated a pause in the game play with both buyers and sellers seen in a balanced position,” it said.
The research house said while the outcome of the decision for not selling into the market on an immediate basis is unknown, but market participants were at least seen not rushing into a trade emotionally just because market sentiment was weak in the preceding day.
It said following the last few minutes buying of selective blue chip stocks to settle the market at the day’s high of 1,828.83 on Jan 19, there should be buying attempt with immediate support at 1,818.
It said a fall below 1,818 would put pressure on the benchmark index to test the subsequent support at 1,812.
“The analysis of overall market action on Jan 19 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,828.83 level on Jan 22,” said AllianceDBS Research.
Based on corporate announcements and news flow last Friday, stocks in focus today may include the following: APFT Bhd, ACME Holdings Bhd, Berjaya Land Bhd, Comintel Corp Bhd, Atta Global Group Bhd, IOI Corp Bhd, NWP Holdings Bhd, PRG Holdings Bhd, Freight Management Holdings Bhd and British American Tobacco (M) Bhd.