KUALA LUMPUR (Feb 12): The FBM KLCI is likely to stay cautious today in line with the overnight plunge at most global markets as concerns intensified over slowing economic growth worlwide, with the banking sector vexing investors the most.

Stock indexes worldwide fell on Thursday on fears over the health of the global economy and banking sector, with MSCI's world stock index dropping to more than 20 percent below its all-time high, while safe-haven 10-year Treasury yields hit their lowest since 2012, according to Reuters.

Concern over sluggish global growth and doubts over central banks' ability to support the global economy pushed the U.S. benchmark S&P 500 index down 10.5 percent for the year. The FTSEurofirst 300 index of top European shares sank to its lowest level in 2-1/2 years, it said.

Maybank IB head of retail research Lee Cheng Hooi in a note to the Edge Financial Daily said that in Malaysia, the FBM KLCI Index moved in a narrower range of 32.05-points for the week with lower volumes of 0.89 billion to 1.23 billion shares traded.

He said the index closed at 1,643.95 on 11 Feb, down 0.46-points from the previous day as blue chip stocks like Axiata Group Bhd, BAT (M) Bhd, Genting Malaysia Bhd, Maxis Bhd and RHB Capital Bhd caused the index to decline on minor profit taking activities.

“The index rose on a rally from the 801.27 low (Oct 2008) to its 1,896.23 all-time high (July 2014) and it represents an extended Elliott Wave “Flat” rebound in a ‘Pseudo-Bull’ rise completed. The next few months’ index price movements since July 2014 comprised of key swings of 1,671.82 (low), 1,867.53 (high), 1,503.68 (low) and 1,727.41 (high).

“The index’s decline from 1,867.53 (Apr 2015) to 1,503.68 (Aug 2015) is in a perfect 1.62-ratio of the initial down-thrust from the high of 1,896.23 (Jul 2014) to the 1,671.82 low (Dec 2014). The subsequent rebound from the 1,503.68 low stalled at the 1,727.41 high, which also a perfect upward 62% retracement of the 1,867.53 to 1,503.68 move.

Lee said the index’s next two minor swings comprised of a minor low of 1,622.84, which then stalled at the 1,706.25 minor high on 30 Dec 2015.

He explained its persistent weaker price action in Jan 2016 was in tandem with the softer tone for global markets and the index troughed at 1,600.92 on 21 Jan 2016.

Lee said the index’s next rebound stalled at 1,670.93 on 10 Feb 2016, with a large and ugly daily Bearish Engulfing candle pattern.

“The index’s daily signals are mixed, with its CCI, DMI, Oscillator and MACD indicators showing positive signals whilst the Stochastic is negative.

“As such, the index’s support levels are seen at the 1,595, 1,618 and 1,638-levels, whilst heavy profit taking at the resistance areas of 1,643, 1,670 and 1,727 will cap any index rebound,” he said.

Based on corporate announcements and news flow yesterday, companies likely to be in focus today are Kulim (Malaysia) Bhd, Oriental Holdings Bhd, Telekom Malaysia Bhd, Green Packet Bhd, Maxwell International Holdings Bhd, My E.G. Services Bhd and Sime Darby Bhd.