KUALA LUMPUR (March 12): The FBM KLCI is expected to trend sideways today and stay above the 1,840-point level, as local sentiment still remains somewhat edgy as evident from the mixed market breadth last Friday.
Stock markets across the globe rose the most in two weeks on Friday after U.S. job growth posted a sharp, unexpected increase, while a planned meeting between U.S. President Donald Trump and North Korea's Kim Jong Un gave crude oil a further boost, according to Reuters.
The yen fell broadly after the Bank of Japan stuck to its dovish policy stance and as Kim's pledge to refrain from further nuclear or missile tests during the proposed talks buoyed investor sentiment, it said.
The Dow Jones Industrial Average rose 440.53 points, or 1.77 percent, to 25,335.74, the S&P 500 gained 47.6 points, or 1.74 percent, to 2,786.57 and the Nasdaq Composite added 132.86 points, or 1.79 percent, to 7,560.81, said Reuters.
AllianceDBS Research in its evening edition last Friday said the FBM KLCI had on March 9 traded within previous day’s range to form an inside day bar as market participants chose to be conservative in their game play.
It said in the absence of stronger buying or selling interest, the benchmark index was in the green throughout the trading sessions before settling near the day’s high at 1,843.92 (up 4.30 points or 0.23%).
“In the broader market, gainers outnumbered losers with 491 stocks ending higher and 459 stocks finishing lower. That gave a market breadth of 1.06 indicating the bulls were in better control,” it said.
AllianceDBS Research said the market took another pause on March 9 with buyers and sellers seen in a balanced position.
It said market participants were not keen to play an aggressive game, this can be seen from the inside day bar formation.
“The market action in the last 2 days basically suggested that this market would begin to consolidate in a small platform between 1,830 and 1,850 in the coming few days because market participants basically did not want to pre-guess what the market would be doing next.
“Many of them chose to be patience and be objective about the market. In other word, market participants were unwilling to bet on the market continuing to move in one direction at this juncture.
“However, a breakout of either 1,830 or 1,850 should see the market gaining momentum in the breakout direction,” it said.
The research house said following the up close on March 9, there should be buying attempt with immediate support at 1,830.
“The analysis of overall market action on March 9 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,844.98 level on March 12,” said AllianceDBS Research.
Based on corporate announcements and newsflow last Friday, stocks in focus today could include UMW Holdings Bhd, Keck Seng (M) Bhd, Muhibbah Engineering (M) Bhd, Heitech Padu Bhd, Tenaga Nasional Bhd and Sasbadi Holdings Bhd.