Friday 29 Mar 2024
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KUALA LUMPUR (Feb 3): The gloomy outlook for stocks on Bursa Malaysia persists as sliding crude oil prices remain the bane for global equities.

U.S. and European stock indexes fell sharply on Tuesday and buyers sought safe-haven government bonds after another tumble in depressed oil prices, according to Reuters.

Benchmark Brent crude settled down 4.4 percent, while U.S. crude fell 5.5 percent, settling below $30 a barrel. Hopes faded for a deal between oil-producing nations to curb a massive supply glut, it said.

AllianceDBS Research in its evening edition Tuesday said despite last Friday’s strong up close, the FBM KLCI had on Feb 2 started the day on a weak note to form an inside day bar as market participants decided not to stage a follow through buying support.

The research house said in the absence of strong supportive buying interest, profit taking activity kicked in.

It said this pushed the benchmark index down to a low of 1,651.29 before settling near the day’s low at 1,653.18 (down 14.62 points or 0.88%).

“In the broader market, losers outnumbered gainers with 463 stocks ending lower and 382 stocks finishing higher. That gave a market breadth of 0.82 indicating the bears were in control,” it said.

AllianceDBS Research said the market saw selling pressure on Feb 2 with most of the selling activity believed to be profit taking pressure.

“The inside day bar indicated a pause in the game play. While the lower high on Feb 2 may be a disappointment to many, but it was viewed a healthy small market adjustment with the benchmark index still seen managing well in the area of 50-day MA line after the 33 points surge in a single day on Jan 29.

“A fall below the 50-day MA line could put pressure on the index down to the subsequent support at 1,630.

“The immediate hurdle is pegged at 1,667. A rise above 1,667 could lift the index to the next resistance zone, 1675 - 1,687,” it said.

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

“The analysis of overall market action on Feb 2 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,651.29 level on 3 Feb 2016,” said AllianceDBS Research.

 

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