KUALA LUMPUR (Feb 19): The FBM KLCI is expected to gear toward the 1,700-point psychological level but gains may be capped on some mild profit taking.
A gauge of stocks around the globe edged higher on Thursday, to extend its best run of the year, as signs of a stabilization in oil prices lifted emerging markets while earnings in Europe and the United States limited gains, according to Reuters.
Brent crude settled down 0.6 percent to $34.28 while U.S. crude settled up 0.36 percent at $30.77 as the commodity pared earlier gains after data showed a build in U.S. crude oil inventories, it said.
AllianceDBS Research in its evening edition Thursday said the FBM KLCI had on Feb 18 opened the day on a firm note.
The research house said the benchmark index subsequently broke above the 1,672 hurdle to reach a high of 1,685.65 as market participants continued to play on the buying side in anticipation of a higher market.
It said under the persistent buying support, the benchmark index was in the green throughout the trading sessions before settling at 1,680.02 (up 15.70 points or 0.94).
“In the broader market, gainers outnumbered losers with 545 stocks ending higher and 302 stocks finishing lower. That gave a market breadth of 1.80 indicating the bulls were in control,” it said.
AllianceDBS Research said the crossover of 1,672 did not come as a surprise except it happened much earlier than expected.
“Nonetheless, the crossover of 1,672 to reach a high of 1,685.86 on Feb 18 had brought cheers to those with stock positions after spending 13 days watching the market swinging between 1,630 and 1,672.
“Of course, those aggressive buyers that had bought into the market earlier were seen taking advantage of the sudden market rise to 1,685.86 as a good opportunity to lock in a portion of their gains.
“This can be seen from the off day’s high settlement on Feb 18,” it said.
The research house said following the up close, the market should be gearing upward again with an eye to test the 1,700 psychological level.
It said that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on Feb 18 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,685.65 level on Feb 19,” said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies likely to be in focus on today include: Boustead Heavy Industries Corporation Bhd, AirAsia Bhd, Bina Darulaman Bhd, UMW Holdings Bdh, Hup Seng Industries Bhd, MK Land Holdings Bhd, I-Bhd, Sarawak Plantation Bhd, Mulpha International Bhd and PUC Founder (MSC) Bhd.