KUALA LUMPUR (Aug 22): The FBM KLCI is expected to trend sideways with immediate support at 1,770, as sentiment at the local market remains nervy still with the corporate earnings season in full swing.
A gauge of world stock indexes edged up after touching a 5-1/2-week low on Monday as geopolitical uncertainty kept gains in check but metals prices dazzled, helped in part by Chinese demand, according to Reuters.
Zinc rose to its highest in a decade, copper hit a nearly three-year peak and iron ore rose to gain nearly 15 percent in the last three sessions, it said.
The Dow Jones Industrial Average rose 29.24 points, or 0.13 percent, to 21,703.75, the S&P 500 gained 2.82 points, or 0.12 percent, to 2,428.37 and the Nasdaq Composite dropped 3.40 points, or 0.05 percent, to 6,213.13, said Reuters.
AllianceDBS Research in its evening edition Monday said despite the last few minutes buying of selective blue chip stocks to settle the market at the day’s high of 1,776.22 on Aug 18, the FBM KLCI was in the red throughout the trading sessions on Aug 21 before settling at the day’s low of 1,771.62 (down 4.60 points or 0.26%) in the absence of stronger buying interest.
“In the broader market, losers outnumbered gainers with 444 stocks ending lower and 379 stocks finishing higher. That gave a market breadth of 0.85 indicating the bears were in better control,” it said.
AllianceDBS Research said the market saw no follow through buying interest on Aug 21 with buyers and sellers were seen in a balanced position.
“This can be seen from the formation of the inside day bar.
“An inside day bar indicated a pause in the game play. Someone asked why the market did not follow the economic data of 5.8% GDP growth for second quarter 2017 announced on 18 Aug 2017.
“Firstly, many of us would NOT disagree that market movement is a function of demand supply equation. Secondly, market participants differ in opinions of what are affecting the demand and supply,” it said.
The research house said that in this case, it was clear that most of the market participants had chosen to ignore the economic data.
It said following the down close on Aug 21, there should be selling attempt again with immediate support at 1,770.
“The analysis of overall market action on Aug 21 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,771.62 level on Aug 22,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies in focus on today may include: Luxchem Corporation Bhd, Malakoff Corporation Bhd, Scomi Energy Servuces Bhd, APM Automotive Holdings Bhd, Inix Technologies Bhd, TH Plantations Bhd, Serba Dinamik Holdings Bhd, Evergreen Fibreboard Bhd, Malaysia Building Society Bhd, Mah Sing Group Bhd, Petronas Dagangan Bhd, RHB Bank Bhd, AMMB Holdings Bhd and Tropicana Corp Bhd.