KUALA LUMPUR (Nov 7): The FBM KLCI is expected to trend sideways today and hover between the 1,730 and 1,740 levels, as local investor sentiment stays muted.
Oil prices surged to their highest since July 2015 on Monday as Saudi Arabia's crown prince cemented his power with a crackdown on corruption, while shares worldwide were little changed and key currencies stayed in tight ranges, according to Reuters.
U.S. crude broke above $56 a barrel for the first time in more than two years as Mohammed bin Salman's clampdown on graft led to arrests of royals, ministers and investors including prominent billionaire investor Alwaleed bin Talal. Brent crude futures were trading more than 3 percent higher at $64.03 a barrel by 1:30 p.m. Eastern time (1830 GMT), it said.
The tech-heavy Nasdaq Composite Index hit a new record high above 6,765.12 on news that chip maker Broadcom Ltd made an unsolicited bid to buy peer Qualcomm Inc for $103 billion, said Reuters.
It said the market was otherwise muted. The Dow Jones Industrial Average rose 22.84 points, or 0.1 percent, to 23,562.03, while the S&P 500 gained 3.79 points, or 0.15 percent, to 6,783.06.
AllianceDBS Research in its evening edition Monday said despite last Friday’s down close, the FBM KLCI had on Nov 6 opened the day on a positive note.
It said the benchmark index subsequently traded marginally higher to 1,745.41.
However, the research house said non-follow through buying interest in the area of 1,745.41 prompted renewed selling interest to chip in.
It said this pushed the benchmark index down to 1,741.43 before settling at 1,742.29 (up 1.36 points or 0.08%).
“In the broader market, losers outnumbered gainers with 451 stocks ending lower and 429 stocks finishing higher. That gave a market breadth of 0.95 indicating the bears were in control with the bulls closely matched,” it said.
AllianceDBS Research said the market saw supportive buying interest on Nov 6 with the benchmark index making a higher high to 1,745.41.
“This simply suggested that market participants were not so willing to play an aggressive selling game in the area of 1,740 in spite of the immediate risk of breaking the 1,740 support on Nov 2 & 3.
“The reason behind the non-follow through selling pressure on an immediate basis was believed to be owing to the perception of lower risk when buying in the demand zone between 1,730 and 1,740,” it said.
The research moreover said that establishing stock positions in the demand zone where market is expected to turn would help to keep the risk low and increase profit zone.
It said following the up close on Nov 6, there should be selling attempt again.
“The analysis of overall market action on Nov 6 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,741.43 level on Nov 7,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: Malaysia Building Society Bhd, Eversendai Corp Bhd, IJM Corp Bhd, UMW Oil & Gas Corp Bhd, Yi-Lai Bhd, PIE Industrial Bhd, Cycle & Carriage Bintang Bhd, Dagang NeXchange Bhd, Eastland Equity Bhd, Nexgram Holdings Bhd, AirAsia X Bhd and CME Group Bhd.