KLCI pares gains as technical signals stay bearish

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KUALA LUMPUR (Oct 14): The FBM KLCI pared some of its gains at the midday break today as technical signals remained bearish at the local bourse.

At 12.30pm, the FBM KLCI was up 8.81 points to 1565.65. The index had earlier risen to a high of 1,568.96.

Gainers led losers by 319 to 227, while 543 counters traded unchanged. Volume was 1.79 billion shares valued at RM900.55 million.

The gainers included Heineken Malaysia Bhd, MISC Bhd, Hong Leong Financial Group Bhd, Carlsberg Brewery Malaysia Bhd, Fraser & Neave Holdings Bhd, Pentamaster Corp Bhd, Nestle (M) Bhd, Aeon Credit Service (M) Bhd, Ajinomoto (M) Bhd and Telekom Malaysia Bhd.

The actives included NetX Holdings Bhd, Bumi Armada Bhd, Sapura Energy Bhd, AME Elite Consortium Bhd, Opcom Holdings Bhd and Perdana Petroleum Bhd.

The decliners included Syarikat Takaful Malaysia Keluarga Bhd, Allianz Malaysia Bhd, Tenaga Nasional Bhd, Genting Plantations Bhd, Spritzer Bhd SLP Resources Bhd and Ta Ann Holdings Bhd.

Asian share markets firmed on Monday as signs of progress in the Sino-US trade standoff whetted risk appetite, though investors were wary of the damage already done to the global economy, according to Reuters.

Indeed, data out from China underlined the pain felt with US dollar-denominated exports and imports both falling by more than expected in September, it said.

Affin Hwang Capital Research said the FBM KLCI Index ended last week on a positive note, gaining 4.97 points or 0.32%, closing at 1,556.84.

From a technical standpoint, moving average convergence divergence (MACD), relative strength index (RSI) & Stochastic are suggesting further weakening in the index for the near term given no clear signs of a bullish reversal; prices continue to trade well below key exponential moving averages (EMAs) on the daily as well as weekly chart, indicating a bearish outlook; and there are still no signs of any clear bullish price action, according to the research house.

"Overall, given unfavourable technical signals on the FBM KLCI Index, bearish view remains. However, do note that prices are quite overextended to the downside, hence a potential short-term rebound may occur anytime, particularly influenced by global major market performance. Nonetheless, any rebound should be perceived as temporary.

"Downward bias remains intact," it said.