KUALA LUMPUR (Sept 1): The FBM KLCI is expected to trend higher albeit staying lacklustre in line with the overnight retreat at most global markets.

World stock indexes fell on Monday as a Federal Reserve official's comments added to investor concerns the bank may start raising interest rates in September, while oil prices jumped more than 8%, extending their biggest price surge in 25 years, according to Reuters.

The S&P 500 registered its biggest monthly percentage drop since May 2012 after being pummeled in the past two weeks on concerns about slowing growth in China, it said.

AllianceDBS Research in its evening edition last Friday said that supported by the up close in the preceding day, the FBM KLCI had on Aug 29 crossed over the 1,616 hurdle to reach an intraday high 1,621.24 as market participants continued to play a buying game in anticipation of a higher market.

The research house said under the persistent buying support, the benchmark index was in the green throughout the trading sessions before settling at 1,612.74 (+11.04, +0.69%) ahead of long weekend.

“In the broader market, gainers outnumbered losers with 463 stocks ending higher and 381 stocks finishing lower. That gave a market breadth of 1.21, indicating the bulls were in control,” it said.

AllianceDBS Research said the benchmark index registered another day of higher high and higher low on Aug 28.

The research house said this gave a total market recovery of 118 points or 48.9% in the last four days compared to the total loss of 241 points measuring from the high of 1,744 (Aug 3, 2015) to the low of 1,503 (Aug 25, 2015).

“However unlike the earlier near day’s high settlement, the benchmark index only secured an up close near the day’s low on Aug 28.

“This small change of game play pattern suggested that market participants with winning trades were starting to lock in a portion of their gains.

“Given the market action on Aug 28, we should see new buying attempt to carry the market higher again with immediate hurdle remains at 1,616,” it said.

The research house said a crossover of 1,616 would see a test of next resistance at 1,630.

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

“The analysis of overall market action on Aug 28 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,621.24 level on Sept 1,” said AllianceDBS Research.