KUALA LUMPUR (Oct 2): The FBM KLCI is expected to extend its gains today riding on the momentum from Oct 1 and the overall higher overnight close at most global markets.

Global equities rose modestly on Thursday in choppy trading and as investors continued to examine the depths of China's slowdown and search for clarity on the timing of an interest rate hike from the US Federal Reserve, according to Reuters.

Wall Street inched up as economic data on the labor market and manufacturing gave mixed messages on the state of the US economy, ahead of a key payrolls report on Friday that may provide clues for when the Fed will hike rates, it said.

AllianceDBS Research in its evening edition Thursday said that supported by the up close in the preceding day, the FBM KLCI had on Oct 1 traded higher to 1,635.13 as market participants continued to play on the buying side in anticipation of a higher market.

The research house said that under the persistent buying interest, the benchmark index was in the green throughout most of the trading sessions before settling near the day’s high at 1,633.93 (up 12.89 points or 0.80%).

“In the broader market, gainers outnumbered losers with 465 stocks ending higher and 306 stocks finishing lower. That gave a market breadth of 1.51 indicating the bulls were in control,” it said.

AllianceDBS Research said the benchmark index witnessed follow through buying activity on Oct 1 with a crossover of the 1,626 hurdle.

“Market participants have chosen to ride on the positive momentum created on Sept 30 after the recent market decline of 96 points measuring from the high of 1,691 (Sept 17, 2015) to the low of 1,595 (Sept 29, 2015).

“Following the higher high on Oct 1, the benchmark index has thus recovered 40 points (1,635 on Oct 1, 2015 minus 1,595) or 41.6% of the lost ground.

“Given the encouraging up close, the benchmark index is expected to test a higher level again with an immediate resistance seen at 1,640,” it said.

The research house said a crossover of 1,640 could see the market gearing towards 1,662.

However, it said a fall back below 1,626 would put pressure on the market back down to the subsequent support at 1,617, adding that indicator wise, the MACD was marginally above the nine-day moving average line.

“The analysis of overall market action on Oct 1 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,635.13 level on Oct 2,” said AllianceDBS Research.