KUALA LUMPUR (Feb 9): The FBM KLCI is expected to trend higher today on rising risk-raking sentiment and anticipation of a higher market.
At the global markets last Friday, the dollar and U.S. government debt yields jumped on Friday as a strong American labor market report raised expectations that the Federal Reserve will increase interest rates by mid-year, according to Reuters.
Wall Street initially rose and European equities hit a seven-year high on the Labor Department report that showed solid U.S. job growth, with wages rebounding strongly. More than one million jobs have been created over the past three months, the first time that has happened since late 1997, it said.
AllianceDBS Research in its evening edition Feb 6 said that supported by the up close in the preceding day, the FBM KLCI had on Feb 6 gapped up to a high of 1,814.30 as market participants rushed in to establish stock positions in anticipation of a higher market.
It said under the strong supportive buying interest, the benchmark index kept its position firm throughout of the trading sessions before settling near the day’s high at 1,813.25 (+ 10.04 , + 0.56%).
“In the broader market, gainers outnumbered losers with 512 stocks ending higher and 291 stocks finishing lower. That gave a market breadth of 1.75 indicating the bulls were in control,” it said.
AllianceDBS Research said there was urgency on the part of market participants to acquire stocks on Feb 6.
It said this could be seen from the upside gap created on the opening bell.
The research house said the benchmark index overcame the 1,810 hurdle.
“Following the strong up close, the benchmark index is ready to trade higher again.
“The crossover of 1,810 should see a test of the recent high of 1,831.41 (Feb 4),” it said.
The research house said the immediate market support was pegged at 1,796.
Indicator wise, the MACD is above the 9-day moving average line, it said.
“The analysis of overall market action on Feb 6 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,814.30 level on Feb 9,” said AllianceDBS Research.