KUALA LUMPUR (April 16): The FBM KLCI is expected to trend higher today, taking the lead from the higher overnight close at Wall Street amidst improved local buying sentiment.
U.S. stocks rallied following several strong earnings reports on Wednesday, while European shares hit a 14-year high after the European Central Bank affirmed its loose policy stance, according to Reuters.
Oil rose sharply after U.S. government data showed crude oil inventories rose less than expected last week, it said.
AllianceDBS Research in its evening edition Wednesday said that dampened by the down close in the preceding day, the FBM KLCI had on April 15 traded marginally lower to 1,836.37 as market participants continued to play on the selling side in anticipation of a lower market.
However, it said non-follow through selling pressure in the area of 1,836.37 prompted renewed buying interest.
It said this lifted the benchmark index back up to a day’s high of 1,846.06 before settling at 1,840.13 (+0.52, +0.03%).
“In the broader market, gainers outnumbered losers with 518 stocks ending higher and 307 stocks finishing lower. That gave a market breadth of 1.68 indicating the bulls were in control,” it said.
AllianceDBS Research said the market bounced off quickly after breaking below the 1,837 support on April 15.
The research house said this somehow showed that 1,837 was viewed a significant level in the eye of many market participants.
It said following the rebound with an up close on April 15, the market is believed to have found its footing in the area of 1,837 at this juncture.
The research house said a consolidation platform was thus expected to be formed between 1,837 and 1,847 in the coming few days.
“A crossover of 1,847 should pave the way upward with next hurdle at 1,850,” it said.
The research house said indicator wise, the MACD was marginally below the 9-day moving average line.
“The analysis of overall market action on April 15 revealed that buying power was stronger / than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,846.06 level on April 16,” said AllianceDBS Research.