KUALA LUMPUR (Aug 20): The FBM KLCI is expected to consolidate today with the 1,600-level as its immediate hurdle in line with the cautious global markets.

Fears about China's economy and falling oil prices kept world equity indexes under pressure on Wednesday, while the dollar lost ground after minutes from the US Federal Reserve's July meeting left uncertainty over the timing of an interest rate hike, according to Reuters.

In a choppy day on Wall Street, major US stock indexes briefly erased their losses and the dollar weakened further after minutes from the Fed's July meeting showed concern from policymakers about lagging inflation and the weak world economy, it said.

AllianceDBS Research in ite evening edition Wednesday said that led by the up close in the preceding day, the FBM KLCI had on August 19 opened the day on a positive note at 1,594.68 as some market participants continued to play on the buying side in anticipation of a higher market.

The research house said under the supportive buying interest, the benchmark index was in the green throughout most of the trading sessions before settling near the day’s low at 1,582.44 (+2.84, +0.18%).

“In the broader market, gainers outnumbered losers with 557 stocks ending higher and 259 stocks finishing lower. That gave a market breadth of 2.15 indicating the bulls were in control,” it said.

AllianceDBS Research said the day’s high of 1,594.68 on opening bell was a good attempt to pull the benchmark index away from the immediate risk of a sell down.

“However, there was no follow through buying interest to lift the market higher than 1,594.68.

“The inability of the benchmark index to trade higher than 1,594.68 saw market participants taking advantage of the sudden market rise.

“This pushed the market down to settle near the day’s low at 1,582.44. Given what happened in the past 2 days, the market is likely to stay between 1,560 and 1,600 in the next few days with both buyers and sellers expected to battle each other for a control of the game play.

“A crossover of 1,600 should see a test of next resistance zone, 1,620 – 1,626,” it said.

The research house said that indicator wise, the MACD was still below the 9-day moving average line.

“The analysis of overall market action on August 19 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,580.25 level on August 20,” said AllianceDBS Research.