KUALA LUMPUR (Aug 30): The FBM KLCI is seen consolidating between 1,673 and 1,690 points today, ahead of the public holiday tomorrow, in line with the mixed overnight close at global markets.
U.S. stock markets climbed on Monday while European share markets slipped in the wake of comments by top Federal Reserve officials that bolstered expectations for an interest rate hike by the U.S. central bank this year, according to Reuters.
Fed Chair Janet Yellen said on Friday the case for a rate increase was strengthening, but provided little detail on when the Fed would next move. Vice Chair Stanley Fischer suggested on CNBC that a rate hike as soon as next month was possible, it said.
AllianceDBS Research in its evening edition Monday said that led by last Friday’s up close in the preceding day, the FBM KLCI had on Aug 29 traded higher to 1,685.18 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 1,685.18 prompted profit taking activity to chip in.
It said this pushed the benchmark index down to 1,677.70 before settling at 1,681.60 (down 1.49 or 0.09%).
“In the broader market, losers outnumbered gainers with 513 stocks ending lower and 314 stocks finishing higher. That gave a market breadth of 0.61 indicating the bears were in control,” it said.
AllianceDBS Research said the market made a higher high on Aug 29, but it failed to sustain in the green throughout most of the trading sessions.
“Given the way this market carried itself in recent days, market participants appeared to have chosen to stay sidelines as market continued to consolidate between 1,673 and 1,690.
“In the absence of positive catalyst, we can see that the overall market momentum is declining and revolving around a small group of blue chip stocks with smaller cap stocks experiencing lower relative strength in relation to the overall market.
“While this is the most probable market scenario to expect at this juncture, an ability on the part of the market to settle above 1,680 should instil renewed buying confidence,” it said.
The research house said a close below 1,676 could send the index down to 1,665, adding that indicator wise, the MACD is below the 9-day moving average line.
“The analysis of overall market action on Aug 29 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,685.18 level on Aug 30,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: AirAsia Bhd, Hong Leong Financial Group Bhd, Felda Global Ventures Holdings Bhd, Brahim’s Holdings Bhd, Sunway Bhd, CIMB Group Holdings Bhd, UMW Holdings Bhd, MyEG Services Bhd, Barakah Offshore Petroleum Bhd, Melati Ehsan Holdings Bhd and IOI Properties Group Bhd.