Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 22): The FBM KLCI is likely to open higher today, following the higher overnight close at US and European markets on expectations of a bond-buying programme by the European Central Bank.

European and U.S. equities rose on Wednesday, lifted by reports the European Central Bank will announce a 50 billion euros per month bond-buying program to boost the euro zone's flagging economy, according to Reuters.

U.S. Treasury prices fell while the euro rose against the dollar. A source told Reuters the ECB's Executive Board has proposed a program that would enable the bank to buy 50 billion euros ($58 billion) in bonds a month from March, it said.

AllianceDBS Research in its evening edition Wednesday, said following the inside day in the preceding day, the FBM KLCI had on Jan 21 been in the green after the opening bell, as market participants took the chance to play a buying game in anticipation of a higher market.

It said in the absence of stronger selling interest, the benchmark index settled at the day’s high of 1,770.09 (+19.98, +1.14%), supported by the last few minutes selective buying of blue chip stocks.

AllianceDBS Research said in the broader market, gainers outnumbered losers with 557 stocks ending higher and 287 stocks finishing lower.

It said that gave a market breadth of 1.94, indicating the bulls were in control.

The research house said the higher high on the back of higher market volume, indicated the presence of supportive buying interest.

“Following the day’s high settlement at the high end of the resistance zone, 1,760 - 1,770, attempts to push the benchmark index higher than 1,770.09 cannot be discounted.

“Judging from the market play book on 21 Jan 2015, this kind of buying momentum is expected to continue.

AllianceDBS Research said a decisive crossover of 1,770.09 should see the market gearing towards the next resistance zone, 1,790 – 1,800.

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

“The analysis of overall market action on Jan 21 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,770.09 level on Jan 22,” said AllianceDBS Research.

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