Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (April 10): The FBM KLCI is expected to trade range bound today with its immediate hurdle at 1,748 points.

The ongoing geopolitical tensions in the Middle East as well as forces allied to Syrian President Bashar al-Assad saying that the US airstrike on a Syrian air base last Friday crossed “red lines” is bound to keep global investors on tenterhooks.

Oil traded to an almost one-month high on Friday after a U.S. missile strike on a Syrian air base while the dollar rose as investors dismissed a weak U.S. jobs report as not enough to derail a strong economy or the outlook for rising interest rates, according to Reuters.

The toughest U.S. action in Syria's six-year-old civil war raised geopolitical uncertainty in the Middle East and initially hit assets considered higher risk such as equities, it said.

Gold, a safe-haven asset, climbed to a five-month high before easing and yields on risk-averse benchmark U.S. Treasuries briefly slid to four-month lows. Stocks pared losses to close higher in Europe and just below break-even on Wall Street, said Reuters.

AllianceDBS Research in its evening edition last Friday said that dampened by the down close in the preceding day, the FBM KLCI had on April 7 broken below the 1,738 support to an intraday low of 1,736.21 as market participants continued to play on the selling side in anticipation of a lower market.

It said in the absence of stronger buying interest, the benchmark index was in the red throughout most of the trading sessions before settling near the day’s high at 1,741.72 (up 2.16 points or 0.12%) in the last few minutes buying of selective blue chip stocks.

“In the broader market, losers outnumbered gainers with 515 stocks ending lower and 425 stocks finishing higher. That gave a market breadth of 0.79 indicating the bears were in better control,” it said.

AllianceDBS Research said the downside violation of the 1,738 support to an intraday low of 1,736.21 on April 7 did not come as a surprise, because the number of willing buyers in the last 3 days had been smaller than the number of willing sellers.

“This can be seen from lower lows registered from April 5 to April 7.

“However, the benchmark index did not go far down below the 1,738 level. Many market participants apparently were not selling as market participants were generally still hopeful about the market bullishness and they are not prepared to sell down in a more aggressive manner at this juncture.

“The inability on the part of market to go lower than 1,736.21 prompted risk taking buying interest,” it said.

The research house said this lifted the market to go back up above the 1,738 level.

It said following the up close on April 7, there should be buying attempt again to carry the market higher with immediate hurdle at 1,748. 

“The analysis of overall market action on April 7 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,741.74 level on April 10,” said AllianceDBS Research. 

Based on corporate announcements and news flow last Friday, companies that may be in focus today could include the following: SKH Consortium Bhd, Key Alliance Group Bhd, CAB Cakaran Corp Bhd, Superlon Holdings Bhd, Kwantas Corp Bhd, Ekovest Bhd and Yong Tai Bhd.

      Print
      Text Size
      Share