KUALA LUMPUR (Dec 12): The FBM KLCI is expected to trend sideways today with immediate support at 1,713.
U.S. stocks closed higher on Monday as investors prepared for an expected Federal Reserve rate hike later in the week, while stocks rose around the world on continued solid global economic growth indicators, according to Reuters.
The Dow Jones Industrial Average and the S&P 500 opened flat after news of an explosion in New York's busy Port Authority commuter hub which New York Mayor Bill de Blasio described as an "attempted terrorist attack,"it said.
The Dow Jones Industrial Average rose 56.87 points, or 0.23 percent, to 24,386.03, the S&P 500 gained 8.49 points, or 0.32 percent, to 2,659.99 and the Nasdaq Composite added 35.00 points, or 0.51 percent, to 6,875.08, said Reuters.
AllianceDBS Research in its evening edition Monday said that supported by last Friday’s up close, the FBM KLCI had on Dec 11 traded higher to 1,725.74 as some market participants continued to play on the buying side in anticipation of a higher market.
However, it said non-follow through buying interest in the area of 1,725 prompted renewed selling interest to chip in.
It said this pushed the benchmark index down to 1,718.30 before settling near the day’s low at 1,719.47 (down 1.78 points or 0.10%).
“In the broader market, gainers outnumbered losers with 444 stocks ending higher and 409 stocks finishing lower. That gave a market breadth of 1.08 indicating the bulls were in better control,” it said.
“The market saw buying activity on Dec 11 after the opening bell with the benchmark index reaching a high of 1,725.74.
“The benchmark index did not go far up because market sentiment was not perceived to favour a more aggressive buying game.
“Generally, there was a belief that what was presented on chart in the last few days would not be expected to sustain for long given the current bearish environment,” it said.
The research house said the rationale behind the conservative buying game play was due to fear of monetary losses as the market was seen not gaining strong positive momentum with possibility of seeing the market turning down south even though a small consolidation platform between 1,713 and 1,730 may have been established over the past few days.
It said that in fact, the market was in need of buying confidence in order to see a market turnaround after the recent sell-off.
The research house said following the down close on Dec 11, there should be selling attempt again with immediate support at 1,713.
“The analysis of overall market action on Dec 11 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,718.30 level on Dec 12,”said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: OldTown Bhd, Pos Malaysia Bhd, KPJ Healthcare Bhd, Al-`Aqar Healthcare Real Estate Investment Trust, LB Aluminium Bhd, Ivory Properties Group Bhd, SWS Capital Bhd, GETS Global Bhd and MUI Properties Bhd.