KUALA LUMPUR (Aug 4): The FBM KLCI is expected to trend sideways with immediate hurdle seen at 1,772, in line with the overnight decline at most global markets, as well as absence of fresh catalysts in the local scene.
A gauge of world stocks declined as Wall Street dipped on Thursday, although European shares rallied, while sterling hit a nine-month low against the euro after the Bank of England's policymakers kept interest rates unchanged, according to Reuters.
Wall Street declined on a pullback in technology shares, the best performing sector so far in 2017. The S&P tech index fell 0.35 percent. However, the Dow Jones Industrial Average posted slight gains to hold above the 22,000 mark breached for the first time on Wednesday, it said.
The Dow Jones Industrial Average rose 9.86 points, or 0.04 percent, to close at 22,026.1, the S&P 500 lost 5.41 points, or 0.22 percent, to 2,472.16 and the Nasdaq Composite dropped 22.30 points, or 0.35 percent, to 6,340.34, said Reuters.
AllianceDBS Research in its evening edition Thursday said the FBM KLCI had on Aug 3 traded higher to 1,772.59 after a firm opening level.
It said under the persistent buying interest, the benchmark index was in the green throughout most of the trading sessions before settling at 1,771.90 (up 1.29 points or 0.07%).
“In the broader market, losers outnumbered gainers with 449 stocks ending lower and 346 stocks finishing higher. That gave a market breadth of 0.77 indicating the bears were in better control,” it said.
AllianceDBS Research said the market registered a higher high again on Aug 3 with a day’s high of 1,772.59.
“However, market participants were seen unwilling to play a more aggressive buying game given the proximity to the 1,772 hurdle since 1,772 is viewed as a supply level where selling supply is expected to exceed buying demand.
“Moreover, there was no news perceived to be positive for market development.
“Many market participants were believed to have been choosing to stay sidelines until a breakout to the upside,” it said.
The research house said following the up close on Aug 3, there should be buying attempt again with immediate hurdle at 1,772.
It said a crossover of 1,772 would see the market gearing towards 1,788.
“The analysis of overall market action on Aug 3 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,772.59 level on Aug 4,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: AirAsia Bhd, Handal Resources Bhd, Sunway Bhd, Fraser & Neave Holdings Bhd, Spring Gallery Bhd, Fajarbaru Builder Group Bhd and Versatile Creative Bhd.