KLCI expected to remain weak in line with global markets

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KUALA LUMPUR (April 14): The FBM KLCI is expected to remain weak today in line with the poorer overnight performance at most global markets and Wall Street over worries over the first quarter corporate earnings in the US.

Equities in major markets slipped on Monday, weighed down by Wall Street on trepidation over first-quarter earnings, while crude prices added to last week's gains on concern about Middle East tensions, according to Reuters.

U.S. stocks ended lower ahead, with traders waiting to see how much of an impact the strengthening dollar and falling oil prices had on Corporate America in the first quarter, it said.

AllianceDBS Research in its evening edition Monday said the FBM KLCI had on April 13 traded within last Friday’s range to form an inside day bar as market participants chose not to play a buying game.

It said that in the absence of strong buying interest, the benchmark index was rather flat throughout the trading sessions before settling near the day’s low at 1,842.08 (-2.23 , -0.12%).

“In the broader market, gainers outnumbered losers with 467 stocks ending higher and 378 stocks finishing lower. That gave a market breadth of 1.23 indicating the bulls were in control,” it said.

AllianceDBS Research said the benchmark index took a pause on April 13 after making a lower low for 3 consecutive days.

The research house said the inability of the benchmark index to stay above the 1.843 level on April 13 suggested a consolidation between 1,837 and 1,850 in the coming few days.

“However, a fall below 1,837 would put pressure on the benchmark index down to the subsequent support at 1,830.

“The overhead resistance is at 1,850,” it said.

Indicator wise, the MACD is above the 9-day moving average line, it said.

“The analysis of overall market action on April 13 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,840.91 level on April 14,” said AllianceDBS Research.