KLCI to edge up, modest gains likely

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KUALA LUMPUR (Oct 30): The FBM KLCI is seen to extend its positive run again today, althought gains could be limited on the back of the modest overnight decline at Wall Street.

U.S. stocks fell while the dollar and government bond yields rose on Wednesday after the Federal Reserve announced the end of its stimulus program in a statement that also noted improvement in the U.S. labor market, according to Reuters.

The Fed, as expected, said it will no longer add to its holdings of Treasury bonds and mortgage-backed securities, effectively ending a program that at its peak pumped $85 billion a month into the financial system to hold interest rates down and boost the flagging economy, it said.

AllianceDBS Research in its evening edition on Oct 29 said the FBM KLCI had on Wednesday pushed through the 1,831 hurdle to settle at the day’s high of 1,839.55 (+13.87, 0.76%) as market participants chose to play on the buying side in anticipation of a higher market.   

It said that in the broader market, gainers outnumbered losers with 586 stocks ending higher and 232 stocks finishing lower, adding that gave a market breadth of 2.52 indicating the bulls were in control. 

AllianceDBS Research said the crossover of 1,831 on 29 Oct 2014 was a pleasant surprise.

It said given the persistent market rise in recent days, the benchmark index should test higher ground again with next hurdle seen at 1,845.

The research house said the support zone is pegged between 1,820 and 1,829. Indicator wise, the MACD is above the 9-day moving average line. 

“The analysis of overall market action on 29 Oct 2014 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,839.55 level on 30 Oct 2014,” it said.