KUALA LUMPUR (Sept 28): The FBM KLCI is expected to trade range bound today, with immediate support at 1,756.
The dollar on Wednesday climbed to a one-month high against a basket of currencies, while financial stocks and Treasury yields rose after strong economic data helped boost expectations for a U.S. Federal Reserve interest rate hike in December, according to Reuters.
U.S. small-cap stocks rallied on the expectation of lower taxes, tallying their biggest single-day gain since March, it said.
On Wall Street, the Dow Jones Industrial Average rose 56.39 points, or 0.25 percent, to 22,340.71, the S&P 500 gained 10.2 points, or 0.41 percent, to 2,507.04 and the Nasdaq Composite added 73.10 points, or 1.15 percent, to 6,453.26, said Reuters.
AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on Sept 27 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through selling pressure.
It said under the persistent selling interest, the benchmark index was in the red throughout most of the trading sessions before settling at 1,764.24 (down 1.35 points or 0.08%).
“In the broader market, gainers outnumbered losers with 401 stocks ending higher and 376 stocks finishing lower. That gave a market breadth of 1.06 indicating the bulls were in better control,” it said.
AllianceDBS Research said the market saw no immediate follow through selling pressure on Sept 27 with both the sellers and buyers were in a balanced position.
“This can be seen from the inside day bar formation which indicated a pause in the game play.
“Like Sept 26, another buying attempt to lift the benchmark index was made on Sept 27, but the buying power was again not strong enough to carry the market above the 1,770 level.
“This showed that market participants were still unwilling to part their investible monies even the benchmark index had lost 32 points in 8 market days measuring from the high of 1,793 (Sept 13) to the low of 1,761 (Sept 26),” it said.
The research house said while the current market environment is not generally viewed as a high probability for trading opportunity, market participants have also become wary about a potential technical rebound given the 5 points distance between the immediate market support of 1,756 and the day’s low of 1,761 (Sept 26.
It said following the down close on Sept 27, there should be selling attempt again with immediate support at 1,756.
“The analysis of overall market action on Sept 27 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,762.09 level on Sept 28,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: Astro Malaysia Holdings Bhd, Yinson Holdings Bhd, Wong Engineering Corp Bhd, PRG Holdings Bhd, V.S. Industry Bhd, Glomac Bhd, Guan Chong Bhd and Goh Ban Huat Bhd.