Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 19): The FBM KLCI is expected to consolidate further today and hover around the psychologically crucial level of 1,600 points in line with the overnight fall at most global markets.

European shares fell on Monday, following Asia lower and led by banks after the European Central Bank said it would quiz euro zone lenders about high levels of bad loans, while oil prices tumbled on the prospect of more supplies from Iran, according to Reuters.

With US markets closed for the Martin Luther King Day holiday, US stock index futures slipped 0.3%, it said.

AllianceDBS Research in its evening edition Monday said the FBM KLCI had on Jan 18 gapped down on opening bell.

The research house said the benchmark index subsequently traded down to a low of 1,608.81 points as market participants rushed to liquidate their stock positions in an anticipation of a lower market.

However, it said weak follow through selling interest in the area of 1,608.81 points prompted risk taking buyers to kick in. This lifted the benchmark index back up to settle at 1,622.64 points (down 5.91 points or 0.36%).

"In the broader market, losers outnumbered gainers with 776 stocks ending lower and 190 stocks finishing higher. That gave a market breadth of 0.24 indicating the bears were in control," it said.

AllianceDBS Research said the downside gap indicated the urgency to unload stock positions.

"Supportive buying interest may have chipped in to lend a helping hand to halt further decline below the 1,608.81 level on Jan 18, but the weak market sentiment is expected to continue haunting the minds of traders and investors.

"Sellers will continue to be in better control over the buyers for the time being.

"Given the market rebound to settle near the day's high at 1,622.64 on Jan 18, there seemed to be an intention on the part of certain market participants to keep the market at a distance from the 1,600 psychological level in an attempt to avoid further sentiment deterioration," it said.

The research house said the hurdle was pegged at 1,628 points, adding that, indicator wise, the MACD was below the nine-day moving average line.

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

"As such, the FBM KLCI would likely trade below the 1,608.81 level on Jan 19," said AllianceDBS Research.

Based on corporate announcements and news flows yesterday, companies that may be in focus today could include: Dagang NeXchange Bhd, CIMB Group Holdings Bhd, EKA Noodles Bhd, Ranhill Holdings Bhd, Malaysia Building Society Bhd, DRB-Hicom Bhd, Hap Seng Consolidated Bhd, Only World Group Holdings Bhd, Abric Bhd, Boustead Holdings Bhd, Media Prima Bhd, CAB Cakaran Corporation Bhd and Axis REIT.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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