KUALA LUMPUR (Feb 25): The FBM KLCI is expected to stay cautious today given the weaker local investor sentiment, with immediate support seen at 1,658 points.
A sharp rebound in crude prices lifted stocks on Wall Street on Wednesday in a late rally, but a gauge of equities across the globe closed lower on lingering concern about economic growth, according to Reuters.
Crude turned higher after data showed US gasoline demand spiked and the S&P 500 climbed steadily after that, ending 2% above its session low, it said.
AllianceDBS Research in its evening edition Wednesday said despite the up close in the preceding day, the FBM KLCI had on Feb 24 broken the 1,670 support.
It said the benchmark index subsequently traded lower to settle at the day's low of 1,664.17 (down 13.11 points or 0.78%) as market participants chose to play the selling game in anticipation of a lower market.
"In the broader market, losers outnumbered gainers with 601 stocks ending lower and 229 stocks finishing higher. That gave a market breadth of 0.38 indicating the bears were in control," it said.
AllianceDBS Research said that having stayed above 1,670 for four consecutive days, the FBM KLCI broke below the 1,670 level on Feb 24.
It said the lower low indicated that sellers were in better control over the buyers.
"The small trading area between 1,670 and 1,686 was supposed to be a consolidation platform for the market to test higher level.
"However, market participants became jittery when the market failed to protect its fort at 1,670 on Feb 24.
"This selling activity pushed the index downward to close at the day's low," it said.
The research house said following the weak down close, the market is likely to come under pressure again to trade lower with immediate support at 1,658.
It said a fall below 1,658 would put pressure on the index down to the subsequent support at 1,650, adding that the hurdle is at 1,686.
It said that indicator wise, the MACD is above the nine-day moving average line.
"The analysis of overall market action on Feb 24 revealed that buying power was weaker than selling pressure.
"As such, the FBM KLCI would likely trade below the 1,664.17 level on Feb 25," said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies that will likely be in focus today may include: Sime Darby Bhd, Telekom Malaysia Bhd, CLIQ Energy Bhd, Karex Bhd, Malaysia Building Society Bhd, Petronas Gas Bhd, Parkson Holdings Bhd, Chemical Company of Malaysia Bhd, TH Heavy Engineering Bhd, MBM Resources Bhd, Protasco Bhd, Malayan Flour Mills Bhd, Fajarbaru Builder Group Bhd, Econpile Holdings Bhd, Kumpulan Europlus Bhd, Paramount Corporation Bhd, ECM Libra Financial Group Bhd, Yi-Lai Bhd and Matrix Concepts Holdings Bhd.