KUALA LUMPUR (Dec 2): The FBM KLCI is expected to extend its gains today, in line with the firmer overnight close at Wall Street amidst improved buying sentiment at the local bourse.

US stocks closed higher on Tuesday despite mixed US economic data as treasury yields and the dollar declined while oil prices were choppy ahead of an Organization of the Petroleum Exporting Countries meeting later this week, according to Reuters.

The euro bounced back from a multi-month low against the US dollar on strong European data and as investors pared bets that the European Central Bank will soon ease policy further, it said.

AllianceDBS Research in its evening edition Tuesday said that despite the down close in the preceding day, the FBM KLCI had on Dec 1 only traded to a low of 1,667.16 as market participants chose not to play an aggressive selling game.

It said that in the absence of stronger selling interest, the benchmark index was in the green throughout most of the trading sessions before settling at the day's high of 1,682.37 (up 10.21 points or 0.61%) in the last few minutes buying of select blue chips.

"In the broader market, gainers outnumbered losers with 549 stocks ending higher and 350 stocks finishing lower. That gave a market breadth of 1.56 indicating the bulls were in control," it said.

AllianceDBS Research said the higher high on Dec 1 indicated that buyers were in better control over the sellers.

"Given the buying and selling activities in the last seven days, the FBM KLCI held its position well with settlement above the 1,670 level.

"Sellers may have sold some of their stock positions when the index fell below the 1,670 level, but they became less conservative in their game play in the area of 1,660.

"This had given a chance to the well-informed knowledgeable minority traders to take advantage of the sell down to acquire stock positions at a lower level," it said.

The research house said based on the recent market behaviour, the benchmark index was expected to move between 1,688 and 1,660 in the coming few days.

It said a crossover of 1,688 should see the index gearing towards the 1,700 hurdle, adding that indicator wise, the MACD was above the nine-day moving average line.

"The analysis of overall market action on Dec 1 revealed that buying power was stronger than selling pressure.

"As such, the FBM KLCI would likely trade above the 1,682.37 level on Dec 2," said AllianceDBS Research.