KUALA LUMPUR (Sept 30): The FBM KLCI is likely to come under selling pressure again today in line with the soft global markets and the tepid local investor sentiment.
Global equity markets reached a two-year low on Tuesday as the outlook for raw materials prices and emerging markets remained soft, while US biotech shares remained under pressure, according to Reuters.
Commodity prices edged up but held near multi-year lows on concern over an economic slowdown in major raw material consumer China. US stocks closed slightly higher in a choppy session, and an early rally in biotechs faded to deal the sector's eighth straight drop, it said.
AllianceDBS Research in its evening edition Tuesday said that after opening the day on a weak note, the FBM KLCI fell below 1,600 to reach an intraday low of 1,595.22 as market participants continued to play on the selling side in anticipation of a lower market.
The research house said under the persistent selling interest, the benchmark index was in the red throughout the trading sessions before settling off the day’s low at 1,603.32 (down 5.11 points or 0.32%).
“In the broader market, losers outnumbered gainers with 598 stocks ending lower and 227 stocks finishing higher. That gave a market breadth of 0.37 indicating the bears were in control,” it said.
AllianceDBS Research said the market witnessed an intraday downside breakout below 1,600 on Sept 29.
“Over the past 7 days, the market registered only 1 up day against 6 down days due to the poor market sentiment.
“The benchmark index has fallen by 96 points measuring from the high of 1,691 (Sept 17) to the low of 1,595 (Sept 29).
“Given the down close on Sept 29, the market is likely to come under selling pressure again with an immediate support at 1,600,” it said.
The research house said a fall below 1,600 could send the market down to the subsequent support at 1,567, adding that indicator wise, the MACD was still staying marginally above the nine-day moving average line.
“The analysis of overall market action on Sept 29 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,595.22 level on Sept 30,” said AllianceDBS Research.