KUALA LUMPUR (Sept 17): The FBM KLCI is expected to trend sideways today in cautious trade despite the higher overnight close at most global markets as local sentiment remains wary still despite government efforts to prop up the local equity market.

Global stock prices rose for a second day on Wednesday with the S&P 500 hitting its highest in almost a month as investors awaited the US Federal Reserve decision on whether raise interest rates for the first time in almost a decade, according to Reuters.

Brent crude prices jumped 4% on a drop in US crude inventories in the latest week, lifting energy shares and the broader equity market, it said.

AllianceDBS Research in its evening edition Tuesday said that led by the up close in the preceding day, the FBM KLCI had on Sept 15 opened the day on a firmer note as market participants continued to play on the buying side in anticipation of a stronger market.

The research house said the benchmark index subsequently reached a high of 1,656.08 under the supportive buying interest.

However, it said selling pressure chipped in to push the benchmark index down to 1,639.97 before settling at 1,647.15 (+7.52, +0.46%).

“In the broader market, gainers outnumbered losers with 432 stocks ending higher and 415 stocks finishing lower. That gave a market breadth of 1.04 indicating the bulls were in control with the bears closely matched,” it said.

AllianceDBS Research said the market ran into resistance in the area of 1,656 as market participants decided to do some profit taking.

“As soon as the last buying order was filled at 1,656.08, sellers still with open selling orders in hand rushed to book the next nearest available buying orders on the queue.

“This forced the benchmark index down to a low of 1,639.97. In fact, the off day’s high closing on Sept 15 was viewed as normal given the recent rise from the low of 1,567 (Sept 7) to the high of 1,656 (15 Sep 15) in the last six market days.

“A preliminary analysis of the market suggested that a small consolidation platform between 1,660 and 1,600 is shaping up,” it said.

Thus, the research house said a crossover of 1,660 should see the market heading towards the next resistance zone, 1,685 to 1,700, adding that indicator wise, the MACD was above the nine-day moving average line.

“The analysis of overall market action on Sept 15 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,639.97 level on Sept 17,” said AllianceDBS Research.