KUALA LUMPUR (Jan 17): Stocks on Bursa Malaysia are expected to trade range bound today with the immediate hurdle for the FBM KLCI seen at 1,830 points.
World stock markets slipped on Tuesday, giving back early gains as Wall Street pulled back from initial highs after a decline in oil and metals dragged energy and materials stocks lower, according to Reuters.
Wall Street had opened higher, as the Dow breached the 26,000 mark for the first time. The healthcare sector, up 0.46 percent, provided support to the upside, with Merck up 5.8 percent and UnitedHealth up 1.9 percent, it said.
The Dow Jones Industrial Average fell 10.33 points, or 0.04 percent, to 25,792.86, the S&P 500 lost 9.8 points, or 0.35 percent, to 2,776.44 and the Nasdaq Composite dropped 37.38 points, or 0.51 percent, to 7,223.69, said Reuters.
AllianceDBS Research in its evening edition Tuesday said the FBM KLCI had on Jan 16 traded lower to 1,818.64 as market participants chose to play on the selling side in anticipation of a lower market.
It said under the persistent selling interest, the benchmark index was in the red throughout most of the trading sessions before rebounding to settle near the day’s high at 1,826.03 (up 0.12 points or 0.01%).
“In the broader market, losers outnumbered gainers with 765 stocks ending lower and 324 stocks finishing higher. That gave a market breadth of 0.42 indicating the bears were in control,” it said.
AllianceDBS Research said that having registered higher highs for 2 days, the market made a lower low on Jan 16 with the benchmark index falling to a low of 1,818.64.
“A buying attempt to lift the market was initiated on the opening bell, but there was no immediate follow through buying pressure to take the benchmark index higher than the opening level.
“This showed that market participants were unwilling to play a buying game for fear of market decline.
“It was believed to be owing to the inability of the benchmark index to keep its position near the high end on Jan 12 and 15,”it said.
The research house said that moreover, the recent market run up from the low of 1,732.93 (Dec 19, 2017) to the high of 1,840.35 (Jan 9) was without any notable corrective move.
“So, what we saw in the last 5 days was an interaction between the buyers and sellers to balance out part of the excessive buying forces created earlier,” it said.
It said following the up close on Jan 16, there should be buying attempt again with immediate hurdle at 1,830.
“The analysis of overall market action on Jan 16 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,827.68 level on Jan 17,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include the following: Advance Synergy Bhd, Ewein Bhd, Vertice Bhd, Caely Holdings Bhd, UMW Oil & Gas Corp Bhd, Leweko Resources Bhd, Telekom Malaysia Bhd, Tenaga Nasional Bhd, Malaysia Building Society Bhd, MMC Corp Bhd, Zelan Bhd, REV Asia Bhd, Eco World International Bhd, Carimin Petroleum Bhd, Dayang Enterprise Holdings Bhd, Deleum Bhd, Petra Energy Bhd and Sapura Energy Bhd.