KUALA LUMPUR (Dec 18): The FBM KLCI is expected to extend its gains today but market sentiment is likely to be cautious given the overnight decline at most global markets, as stilll weak crude oil price weighed on the energy sector.

U.S. stocks led a decline in most equity markets around the globe on Thursday, a day after the Federal Reserve's first interest rate hike in nearly a decade, as continued pressure on oil weighed on the energy sector, according to Reuters.

The long-expected but modest increase in the federal funds rate also boosted the dollar to a fresh two-week high against a basket of major currencies, while Wall Street snapped a three-day rally, it said.

AllianceDBS Research in its evening edition Thursday said that led by the up close in the preceding day, the FBM KLCI had on Dec 17 crossed over the 1,645 hurdle to settle at the day’s high of 1,656.52 (+22.39, 1.37%) as market participants chose to play on the buying side in anticipation of a higher market.

“In the broader market, gainers outnumbered losers with 594 stocks ending higher and 298 stocks finishing lower. That gave a market breadth of 1.99 indicating the bulls were in control,” it said.

AllianceDBS Research said that having registered the first higher high and higher low on Dec 16 over the past 6 days, the FBM KLCI went on to overcome the 1,645 hurdle in the subsequent day.

“The crossover of 1,645 hurdle was indeed encouraging given the recent sell-off which took the benchmark index down from the high of 1,688 (Nov 26) to the low of 1,622 (Dec 15).

“The way this market carried itself on Dec 17 has shown that there was a greater willingness on the part of market participants to play a buying game compared to the earlier period from Dec 2 to Dec 16.

“Following the strong up close on Dec 17, the market is expected to move higher again with immediate hurdle seen at 1,663,” it said.

The research house said the market support zone was pegged between 1,628 and 1,635,adding that indicator wise, the MACD is still marginally below the 9-day moving average line.

“The analysis of overall market action on Dec 17 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1.656.52 level on Dec 18,” said AllianceDBS Research.

Based on corporate announcements and news flows yesterday, companies in focus today could include: Scientex Bhd, Instacom Group Bhd, Kossan Rubber Industries Bhd, Gadang Holdings Bhd, Ajinomoto (Malaysia) Bhd, Wintoni Group Bhd, Anzo Holdings Bhd, Telekom Malaysia Bhd, Comintel Corporation Bhd and REDtone International Bhd.