KUALA LUMPUR (Jan 19): The FBM KLCI is expected to extend its gains today, riding on its current momentum but any advance may be capped by caution ahead of the inauguration of Donald Trump on Friday.

The U.S. dollar edged higher and stocks gained ground on Wednesday after the top U.S. monetary policy official spoke, but investors voiced caution over how U.S. policy will develop under Donald Trump's presidency two days before his inauguration, according to Reuters.

Oil futures tumbled, dragging down the energy sector index, which was one of the biggest weights on the S&P 500. U.S. Treasury yields rose after remarks by U.S. Federal Reserve chair Janet Yellen were released and after U.S. inflation data, it said.

AllianceDBS Research said that led by the up close in the preceding day, the FBM KLCI had on Jan 18 opened the day on a firm note.

It said the benchmark index subsequently traded to a high of 1,670.59 as market participants continued to play on the buying side in anticipation of a higher market.

The research house said that under the persistent buying interest, the benchmark index was in the green throughout the trading sessions before settling off the day’s high at 1,665.02 (up 1.99 points or 0.12%).

“In the broader market, gainers outnumbered losers with 431 stocks ending higher and 366 stocks finishing lower. That gave a market breadth of 1.17 indicating the bulls were in better control,” it said.

AllianceDBS Research said having found supportive buying interest with an up close on Jan 17, the market went on to make a higher high on Jan 18.

“Market participants were seen willing to play a buying game because the sell down on Jan 16 appeared to have carried no obvious cause. In the eyes of these market participants, the sell down was merely a pullback to the rally extending from the low of 1,630 .67 (Jan 3) to 1,682.74 (Jan 6).

“So, what we saw in the last 2 days were market recoveries as a result of interaction among the market participants.

“Following the up close on Jan 18, the market should trade higher again with immediate hurdle pegged at 1,672,” it said.

The research house said market support is seen at 1,658.

It said a fall below 1,658 could send the market down to the subsequent support at 1,652, adding that indicator wise, the MACD is still above the 9-day moving average line.

“The analysis of overall market action on Jan 18 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,670.59 level on Jan 19,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today include Silk Holdings Bhd, Gadang Holdings Bhd, Genting Bhd, Mesiniaga Bhd, WCT Holdings Bhd, Axiata Group Bhd, Uzma Bhd, Guocoland (M) Bhd, Spring Gallery Bhd, Country View Bhd, FSBM Holdings Bhd, Tex Cycle Technology (M) Bhd, Green Packet Bhd and Yen Global Bhd.