KUALA LUMPUR (Sept 2): The FBM KLCI is expected to stay cautious today and remain lacklustre amidst the turmoil at global markets on concerns over a slowdown in China’s economy that roiled world stock exchanges as well as crude oil prices overnight.

World stock indexes and oil prices slumped on Tuesday as weak Chinese data fueled worries about a slowdown in its economy, the world's second biggest, and sparked more market turmoil, according to Reuters.

The fall in oil prices ended a three-day rally that had driven crude up more than 20%. Brent fell below $50 a barrel on concerns about global demand for petroleum, it said.

AllianceDBS Research in its evening edition Tuesday said that the FBM KLCI had on Sept 1 traded up by around 43 points on opening bell as some market participants chose to pay up the index heavyweights.

The research house said the benchmark index subsequently reached a high of 1,660.22 on follow through buying.

However, it said the inability of the market to rise above 1,660.22 attracted renewed selling interest which pushed the benchmark index down to a low of 1,603.25 before settling off the day’s low at 1,609.21 (down 3.53 points or 0.22%).

“In the broader market, losers outnumbered gainers with 400 stocks ending lower and 369 stocks finishing higher. That gave a market breadth of 0.92 indicating the bears were in control with the bulls closely matched,” it said.

AllianceDBS Research said the market had a rough roller coaster ride on the first trading day of September 2015 with 43 points up on the opening bell, but ended with 3.53 points down.

“The unusual high opening level by scooping up the index linked heavyweights was believed to be an attempt to accelerate the market momentum after 4 straight days of higher highs.

“However, market participants with winning trades saw the opportunity to quickly lock in their windfalls when the last buying order at 1,660.22 was filled.

“The selling action was logical because the market has risen by a whopping 157 points or 65.1% in 5 market days compared to the total loss of 241 points measuring from the high of 1,744 (August 3, 2015) to the low of 1,503 (August 25, 2015).

“Given the down close, the market is expected to come under pressure to test lower level again with immediate support seen at 1,600,” it said.

The research house said a fall below 1,600 could send the market down to the subsequent support zone, 1,550–1,570. 

It said the immediate hurdle is pegged at 1,621, adding that indicator wise, the MACD was still above the 9-day moving average line.

“The analysis of overall market action on Sept 1, 2015 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,603.25 level on Sept 2, 2015,” said AllianceDBS Research.