KLCI likely to remain weak on lack of catalysts, weaker buying interest

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KUALA LUMPUR (Dec 12): The FBM KLCI is expected to remain listless going into the weekend despite the uptrend at most global markets and Wall Street, as lack of fresh domestic catalysts and weaker buying interest are likely to keep the local bourse activities muted.

The dollar and most global equity markets on Thursday, snapped three days of losses after strong U.S. retail sales and declining jobless claims signaled the U.S. economy could weather weak oil prices and a likely interest rate hike next year, according to Reuters.

U.S. stocks rose on Thursday, as upbeat retail sales and other U.S. data pointed to a strengthening U.S. economy and lifted optimism about consumer spending.

Indexes ended well off their highs for the day, however, paring gains late in the session as Brent oil settled down 0.9 percent, putting a lid on energy shares, and as worries increased about a possible U.S. government shutdown, said Reuters.

AllianceDBS Research in its evening edition Thursday said despite the up close in the preceding day, the FBM KLCI had on Dec 11 traded within previous day’s range, after the weak opening to form an inside day bar as market participants were unsure of the immediate market direction.

It said the benchmark index was in the red throughout the trading sessions, before settling near the day’s low at 1,744.59 (- 20.95, - 1.19%).

“In the broader market, losers outnumbered gainers, with 626 stocks ending lower and 178 stocks finishing higher. That gave a market breadth of 0.28, indicating the bears were in control,” it said.

AllianceDBS Research said the inside day bar indicated a pause in the game play.

It added that the benchmark index did not trade higher on Dec 11, as expected earlier. 

“Given the result of interaction among the market participants on Dec 11, it appeared that there was a stronger selling interest in the game play.

“Following the down close, the market is likely to move between 1,730 and 1,766 in the coming few days,” it said.

The research house said a trade above 1,757 should see the benchmark index moving towards the next hurdle at 1,769.

Indicator wise, the MACD is below the 9-day moving average line,” it said.

“The analysis of overall market action on 11 Dec 2014, revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,742.35 level on Dec 12,” said AllianceDBS Research.