KUALA LUMPUR (Oct 1): The FBM KLCI is expected to trend higher on the first trading day of the fourth quarter of 2015 on teh back of the upbeat overnight close at most global markets.

Global equities ended their worst quarter since the 2011 euro zone crisis on an upbeat note with a rally on Wednesday on hopes that Wall Street had bottomed and the commodities rout was over, while the dollar also rose, according to Reuters.

Major equity indexes around the world declined 10 percent or more from July through September as fears mounted of a global slowdown brought on by China. Slower Chinese growth also slammed commodity prices and countries that depend on their export, it said.

AllianceDBS Research in its evening edition Wednesday said that despite the down close in the preceding day, the FBM KLCI had on Sept 30 traded higher to 1,621.86 as market participants changed their game play to buying.

The research house said that in the absence of stronger selling interest, the benchmark index was in the green throughout most of the trading sessions before settling near the day’s high at 1,621.04 (+17.72, +1.11%).

 
"In the broader market, gainers outnumbered losers with 573 stocks ending higher and 272.06 stocks finishing lower. That gave a market breadth of 2.06 indicating the bulls were in control," it said.

AllianceDBS Research said that having found support above the 1,600 level on Sept 29, the benchmark index saw follow through buying interest in the next day (Sept 30).

"The buying activity was believed to be an attempt to pull the benchmark index away from the immediate risk of breaking below the 1,600 level.

"The market reaction on Sept 30 comes as no surprise after losing 96 points in 7 days measuring from the high of 1,691 (17 Sep 2015) to the low of 1,595 (29 Sep2015).

"Following the up close, the market should test higher level again with hurdle seen at 1,626," it said, adding that indicator wise, the MACD was marginally above the 9-day moving average line.

 "The analysis of overall market action on Sept 30 revealed that buying power was stronger than selling pressure.

"As such, the FBM KLCI would likely trade above the 1.621.86 level on Oct 1," said AllianceDBS Research.