KUALA LUMPUR (Sept 26): The FBM KLCI’s lacklustre run is expected to persist today in line with the jittery global equity markets rattled by negative newsflow emanating from the spectre of a conflict in the Korean peninsula as well as the German elections.
Stocks fell on Wall Street and U.S. government bond yields dropped on Monday after North Korea accused the United States of having declared war on the isolated country, while the euro fell after German elections showed support for Chancellor Angela Merkel's conservative party fell to its lowest since 1949, according to Reuters.
Separately, Brent oil futures touched a more-than-2-year high after major producers said the crude market was on track to rebalance and Turkey threatened to cut oil flows from Iraq's Kurdistan region toward its ports, it said.
The Dow Jones Industrial Average fell 53.5 points, or 0.24 percent, to 22,296.09, the S&P 500 lost 5.56 points, or 0.22 percent, to 2,496.66 and the Nasdaq Composite dropped 56.33 points, or 0.88 percent, to 6,370.59, said Reuters.
AllianceDBS Research in its evening edition Monday said that dampened by last Thursday’s down close, the FBM KLCI had on Sept 25 traded lower to 1,768.16 as market participants continued to play on the selling side in anticipation of a lower market.
It said under the persistent selling interest, the benchmark index was in the red throughout most of the trading sessions before settling near the day’s low at 1,769.14 (down 1.90 points or 0.11%).
“In the broader market, losers outnumbered gainers with 626 stocks ending lower and 259 stocks finishing higher. That gave a market breadth of 0.41 indicating the bears were in better control,” it said.
AllianceDBS Research said the market pierced through the 1,770 level on Sept 25 to reach a low of 1,768.16.
“Given the absence of positive news flow, market participants were again unwilling to play a buying game as they did not want to see their investible monies being locked up.
“This explained the reason behind why many market participants tend to have a higher tendency to sell than buy.
“At the day’s low of 1,768.16, the market had given back 25 points (1,793 minus 1,768) or 67.5% out of the 37 points minor rally recorded from the low of 1,756 to the high of 1,793 (Sept 13),” it said.
The research house said following the down close on Sept 25, there should be selling attempt with immediate support at 1,766.
“The analysis of overall market action on Sept 25 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,768.16 level on Sept 26,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, stocks in focus today may include: Damansara Realty Bhd, Ho Wah Genting Bhd, AirAsia Bhd, FoundPac Bhd, MISC Bhd, Dialog Group Bhd, HLT Global Bhd, PLB Engineering Bhd, Alliance Bank Malaysia Bhd, Alliance Financial Group Bhd, Iris Corp Bhd, Lotte Chamical Titan Holding Bhd, Bison Consolidated Bhd, Poh Huat Resources Bhd and Comintel Corp Bhd.