KUALA LUMPUR (May 27): The FBM KLCI is expected to continue to consolidate today with hurdle remaining at 1,637 points, in line with the lower close at Wall Street, and muted corporate earnings at Bursa Malaysia.

The U.S. dollar slipped on Thursday after U.S. durable goods orders data showed weakness in business spending plans, while world stock indexes edged higher, extending recent gains, according to Reuters, adding that U.S. oil prices closed slightly lower after earlier topping $50 a barrel for the first time in about seven months.

It said the Dow Jones industrial average was down 17.16 points, or 0.1 percent, to 17,834.35, the S&P 500 gained 1.19 points, or 0.06 percent, to 2,091.73 and the Nasdaq Composite added 9.51 points, or 0.19 percent, to 4,904.40.

MSCI's all-country world stock index rose 0.3 percent, while the FTSEurofirst 300 closed up 0.2 percent, it said.

AllianceDBS Research in its evening edition Thursday said despite the last few minutes buying of selective blue chip stocks to prop up the benchmark index to settle near the day’s high in the preceding day, the FBM KLCI had on May 26 opened the day on a weak note as market participants were unwilling to take the chance of staging an immediate follow through buying support. However, non-follow through selling pressure in the area of 1,628.19 saw risk taking buying interest chipping in.

It said this lifted the index to a high of 1,638.17 before settling near the day’s low at 1,631.09 (up 0.13 points or 0.01%). 

“In the broader market, losers outnumbered gainers with 475 stocks ending lower and 315 stocks finishing higher. That gave a market breadth of 0.66 indicating the bears were in control,” it said.

AllianceDBS Research said that having run into resistance at 1,637 in the last 6 days, the benchmark index finally ‘crossed’ over the 1,637 hurdle on May 26.

“But, the market could not sustain its position above the 1,637 level as market participants were still reluctant to be more aggressive in buying game.

“This can be seen from the fall back below the 1,637 level with a settlement of 1,631.09 on May 26.

“While the 1,637 level remains a hurdle, the short-lived crossover of 1,637 on May 26 should open up the room for more buying attempts to carry the market higher with buying momentum expected to gather pace if the market were to overcome the subsequent 1,637 hurdle again,” it said.

It said a decisive crossover of 1,637 should see a test of new resistance selling zone, 1,645 – 1,652, adding that indicator wise, the MACD is above the 9-day moving average line.

“The analysis of overall market action on May 26 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,638.17 level on May 27,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include the following: Eastern & Oriental Bhd, Versatile Creative Bhd, AirAsia Bhd, CIMB Group Holdings Bhd, Brahim's Holdings Bhd, 7-Eleven Malaysia Holdings Bhd, Engtex Group Bhd, Malaysian Resources Corp Bhd and IJM Corp Bhd.