KUALA LUMPUR (May 4): The FBM KLCI is expected to trade lower today and consolidate further with support pegged at 1,650 points, in line with the overnight slump at most global markets.

Stock markets worldwide fell on Tuesday after weak Chinese and British factory data rekindled fears of slowing global growth, sending benchmark Treasury yields to nearly two-week lows, according to Reuters.

Activity at China's factories shrank for the 14th straight month in April as demand stagnated, a private survey showed. The data contributed to a drop in oil prices on worries over demand, given the country's status as a major oil importer, it said.

AllianceDBS Research in its evening edition Tuesday said the FBM KLCI had on May 3 traded marginally higher to 1,676.03 after the opening bell as some market participants chose to play on the buying side in anticipation of a higher market.

However, it said non-follow through buying interest in the area of 1,676.03 prompted renewed selling interest to chip in.

It said this pushed the benchmark index down to a low of 1,649.79 before settling at 1,651.44 (down 21.28 points or 1.27%). 

“In the broader market, losers outnumbered gainers with 624 stocks ending lower and 221 stocks finishing higher. That gave a market breadth of 0.35 indicating the bears were in control,” it said.

AllianceDBS Research said a buying attempt was made on May 3 to keep the market on the positive side, but the market failed to stay in the green for long.

“Market participants apparently were unwilling to play a buying game in face of weak market sentiment.

“This can be seen from the marginal higher high on May 3.

“As soon as the last buying order was filled at 1,676.03, sellers began to pour in with aggressive sellers quickly seized the opportunity to book the next available buyers in line,” it said.

The research house said this created an imbalanced demand supply relationship.

It said under the overwhelming selling supply, the benchmark index fell sharply lower to a low of 1,649.79.

AlliancedDBS Research said following the weak down close, the market is expected to go lower again with immediate support pegged at 1,650.

It said a fall below 1,650 would put pressure on the index down to the next support at 1,640, adding that the hurdle is pegged at 1,676.

It said that indicator wise, the MACD is below the 9-day moving average line.

“The analysis of overall market action on May 3 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,649.79 level on May 4,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that will be in focus today may include: Press Metal Bhd, Ho Hup Construction Company Bhd, Hartalega Holdings Bhd, Kimlun Corporation Bhd, Felda Global Ventures Holdings Bhd, Malakoff Corporation Bhd, Nationwide Express Courier Services Bhd, and LBS Bina Group Bhd.