KUALA LUMPUR (Sept 3): The FBM KLCI is expected to remain lacklustre given the absence of fresh catalysts at the local market.

However, the recent hammering at Bursa Malaysia, there may be pockets of buying opportunities at the local market that may help support the FBM KLCI.

Global stock indexes rose on Wednesday, helped by reports of brokerage measures in China to invigorate the country's battered markets, while oil bounced from earlier losses to end nearly 2% higher, according to Reuters.

The S&P 500 jumped 1.8%, rebounding from Tuesday's steep losses. An upward revision in US productivity data and a Federal Reserve report saying US labor markets were tight enough to fuel small wage gains in some professions in recent weeks boosted sentiment, it said.

AllianceDBS Research in its evening edition Wednesday said that dampened by the weak down close in the preceding day, the FBM KLCI had on Sept 2 gapped down to reach a low of 1,583.63 as market participants rushed to unload their stocks in anticipation of a lower market.

The research house said that in the absence of stronger buying interest, the benchmark index was in the red throughout the trading sessions before settling off the day’s low at 1,590.19 (down 19.02 or 1.18%).

“In the broader market, gainers outnumbered losers with 379 stocks ending higher and 347 stocks finishing lower. That gave a market breadth of 1.09 indicating the bulls were in better control,” it said.

AllianceDBS Research said the benchmark index witnessed follow through selling pressure on Sept 2 with a downside gap on the opening bell.

“Following the down close on Sept 2, the benchmark index is likely to test a lower level again with an immediate support at 1,580.

“A fall below 1,580 would put pressure on the market down to the subsequent support zone of 1,550–1,570.

“A study of market actions for the past 6 market days revealed that there was a high level of interaction among the market participants with buyers loading up beaten down stocks in the area of 1,500 and sellers distributing their stocks near the 1,660 level,” it said.

The research house said that as such, the benchmark index is expected to stay between 1,500 and 1,660 for a little while as the 160 points of high-low range are seen wide enough for aggressive market participants to trade.

It said that indicator wise, the MACD was still above the 9-day moving average line.

“The analysis of overall market action on Sept 2 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,583.63 level on Sept 3,” said AllianceDBS Research.