KUALA LUMPUR (April 10): The FBM KLCI is expected to stage a mild rebound today and end the week on a positive note in line with the improved sentiment at most global markets.
World equity markets rose on Thursday, led by European exchanges after stronger-than-expected German economic figures and Greece's repayment of a 450 million euro loan to the International Monetary Fund, according to Reuters.
The dollar added to recent gains, on a continued reaction to more hawkish comments from Federal Reserve officials suggesting that a June interest-rate increase could still be a possibility. U.S. bond yields were also higher, after a weak sale of 30-year Treasury bonds, it said.
AllianceDBS Research in its evening edition Thursday said that dampened by the down close in the preceding day, the FBM KLCI had on April 9 traded lower to a low of 1,843.99 as market participants continued to play on the selling side in anticipation of a lower market.
It said in the absence of strong supportive buying interest, the benchmark index was in the red throughout the trading sessions before rebounding to close near the day’s high at 1,849.39 (- 0.92 , - 0.05%) in the last few minutes buying of selective blue chip stocks.
In the broader market, gainers outnumbered losers with 479 stocks ending higher and 374 stocks finishing lower. That gave a market breadth of 1.28 indicating the bulls were in control,” said the research house.
AllianceDBS Research said the market witnessed another day of profit taking activity on April 9 as market participants with winning trades chose to realize a portion of their trading gains.
It said the lower low on April 9 may have caused certain amount of disappointment to some market participants.
“However, the pullback was in fact viewed healthy given the recent steady run up from 1,774 (March 16) to 1,856 (April 7).
“Following the down close, the benchmark index is expected to consolidate further between 1,856 and 1,843. A fall below 1,843 would put pressure on the market down to the subsequent support at 1,835,” it said.
The research house said that indicator wise, the MACD is above the 9-day moving average line.
“The analysis of overall market action on April 9 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,849.77 level on April 10,” said AllianceDBS Research.