KUALA LUMPUR (Aug 26): The FBM KLCI is expected to remain muted today and gyrate between the 1,676 and 1,690 zones, pending clarity from the US Federal Reserve on its interest rate policy.

Most investors refrained from making big bets on Thursday ahead of the start of a central bankers' meeting in the mountains of Wyoming that could clarify the path of U.S. interest rate policy, according to Reuters.

Federal Reserve Chair Janet Yellen will deliver the keynote speech on Friday, but she may struggle to convince financial markets she can steer a divided U.S. central bank to raise interest rates at least once in 2016 after it started the year with four hikes on its radar, it said.

AllianceDBS Research in its evening edition Thursday said despite the down close in the preceding day, the FBM KLCI had on Aug 25  traded higher to 1,687.64 as market participants chose to play on the buying side in anticipation of a higher market.

However, it said weak follow through buying in the area of 1,678 prompted profit taking activity. This pushed the benchmark index to settle near the day’s low at 1,680.30 (down 1.76 points or 0.10%). 

“In the broader market, losers outnumbered gainers with 523 stocks ending lower and 297 stocks finishing higher. That gave a market breadth of 0.56 indicating the bears were in control,” it said.

AllianceDBS Research said the market made lower low on Aug 25, but it did not go far down as sellers were still seen unwilling to sell down the market for fear of market turnaround.

“The ability on the part of benchmark index to stay supportive between 1,676 and 1,680 somehow gave a chance to the aggressive buyers to acquire some beaten down stocks.

“However, the market could not sustain its position on the high end as market participants with winning trades in earlier days had decided to lock in another portion of their profits.

“Given the down close on Aug 25, buyers and sellers are thus expected to exchange their stock positions between 1,676 and 1,690 in the coming few days until we see a breakout,” it said.

The research house said that indicator wise, the MACD was below the 9-day moving average line.

“The analysis of overall market action on Aug 25 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,678.64 level on Aug 26,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: Genting Bhd, Guocoland (M) Bhd, Malaysian Resources Corp Bhd, Gadang Holdings Bhd, Uzma Bhd, 7-Eleven Malaysia Holdings Bhd, MMC Corp Bhd, Eastern & Oriental Bhd (E&O), Censof Holdings Bhd and Tropicana Corp Bhd.