KUALA LUMPUR (Jan 10): The FBM KLCI is expected to trade range bound today with immediate support at 1,813.
At the local bourse, oil and gas-related stocks could stay in focus as crude oil prices stays firm.
Reuters reported that Benchmark Brent crude rose further above US$68 a barrel on Tuesday, supported by oil output cuts led by the Organization of the Petroleum Exporting Countries and allies including Russia that are due to run until the end of 2018.
Stocks in world indexes continued their flying start to the year on Tuesday as bank stocks gained, while U.S. oil touched its highest since late 2014, according to Reuters.
A tweak to the Bank of Japan's bond-buying program shunted the yen higher, while the dollar climbed against a basket of major currencies, recovering further from last week's decline to its lowest in more than three months, it said.
The Dow Jones Industrial Average rose 115.62 points, or 0.46 percent, to 25,398.62, the S&P 500 gained 8.11 points, or 0.30 percent, to 2,755.82 and the Nasdaq Composite added 11.77 points, or 0.16 percent, to 7,169.15, said Reuters.
AllianceDBS Research in its evening edition Tuesday said that led by the up close in the preceding day, the FBM KLCI had on Jan 9 opened the day on a positive note.
It said the benchmark index subsequently traded to a high of 1,840.35 as market participants continued to play a buying game in anticipation of a higher market.
However, it said non-follow through buying support in the area of 1,840.35 prompted profit taking activity to chip in.
It said this pushed the benchmark index down to 1,823.52 before settling near the day’s low at 1,826.95 (down 5.20 points or 0.28%).
“In the broader market, losers outnumbered gainers with 716 stocks ending lower and 387 stocks finishing higher. That gave a market breadth of 0.54 indicating the bears were in control,” it said.
AllianceDBS Research said having closed above the 1,830 hurdle with a day’s high settlement of 1,832.15 on Jan 8, the market continued to make a higher high again on Jan 9 with the benchmark index trading into the 1,840 zone after the opening bell.
“The crossover of 1,840 suggested that some market participants were excited about the positive market momentum created over the past few days, and they were seen willing to gamble their luck on the buying side after the extraordinary market volume of 6.96 bn shares recorded on Jan 8.
“In other words, the higher high above the 1,830 hurdle on Jan 8 and persistent high market volume in recent days were the key drivers that pushed the traders and investors into buying positions.
“However, the inability on the part of the market to go higher than 1,840.15 seemed to signify that all of the aggressive potential buyers had already jumped in and there was no new buying support to carry the market higher on an immediate basis.
“This had somehow created a concern of profit taking pressure which saw the market slipping back below the 1,830 level to a low of 1,823.52,” it said.
The research house said following the down close on Jan 9, there should be selling attempt again with immediate support at 1,813.
“The analysis of overall market action on Jan 9 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,823.52 level on Jan 10,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that will be in focus today may include: R&A Telecommunications Bhd, Serba Dinamik Holdings Bhd, Mitrajaya Holdings Bhd, IDimension Consolidated Bhd, Perdana Petroleum Bhd, Dayang Enterprise Holdings Bhd, Sedania Innovator Bhd, Uzma Bhd, Peterlabs Holdings Bhd and Prestar Resources Bhd.