KUALA LUMPUR (Dec 16): The FBM KLCI could stage a mild recovery today in line with overnight the rally at most global markets.

The recent selloff at the local bourse may present bargain hunting opportunities for investors, help prop up the benchmark FBM KLCI.

Global equity markets rallied on Tuesday as oil prices bounced from multi-year lows, though investors remained leery about the possibility of increased volatility with a widely-anticipated increase in US interest rates due later this week, according to Reuters.

Oil reversed early falls to snap a six-day slide as bargain hunters moved in after crude dropped to its lowest level since December 2008 in the prior session. The jump helped boost equities in both the United States and Europe, it said.

AllianceDBS Research said that despite the downside gap in the preceding day, the FBM KLCI had on Dec 15 traded lower to settle at the day’s low of 1,622.84 in the last few minutes selling of selective blue chips (down 7.12 points or 0.44) as market participants were still seen reluctant to play a buying game.

“In the broader market, gainers outnumbered losers with 387 stocks ending higher and 386 stocks finishing lower. That gave a market breadth of 1.00 indicating the bulls and bears were closely matched,” it said.

AllianceDBS Research said the higher opening level on Dec 15 was encouraging, but it failed to excite the market as market participants were unwilling to take the chance to play on the buying side after the recent sell-off.

“Buyers are expected to adopt a conservative approach in their game play with immediate support seen at 1,620. 

“A fall below 1,620 would put pressure on the benchmark index down to the subsequent support zone, 1,595–1,600.

“The resistance zone is pegged at 1,629,” 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 Dec 15 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,622.84 level on Dec 16,” said AllianceDBS Research.