Friday 29 Mar 2024
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KUALA LUMPUR (Jan 12): Stocks on Bursa Malaysia are expected to face some downward pressure today as bearish sentiment seems to be in control with the global economic worries with uncertainties emanating from China and hammered crude oil prices.

Meanwhile,  Moody's cut Malaysia's sovereign rating outlook to stable from positive on Monday due to the negative impact of changes in the external environment on the Southeast Asian economy's growth.

Wall Street rallied to finish slightly higher on Monday, steadying after a brutal start to 2016, while beaten-down oil prices plunged further after a fresh tumble for Chinese stocks, according to Reuters.

In a volatile session in which U.S. stocks were lower much of the day, the S&P 500 and the Dow rallied to close higher after last week posting their worst-ever five-day starts to the year, it said.

AllianceDBS Research in its evening edition Monday said that after opening the day on a marginal gain, the FBM KLCI reversed its position to break below the 1,650 support on Jan 11.

It said under the persistent selling pressure, the benchmark index was deep in the red before settling at day’s low of 1,637.59 down  20.02 points or 1.21%).

“In the broader market, losers outnumbered gainers with 657 stocks ending lower and 300 stocks finishing higher. That gave a market breadth of 0.45 indicating the bears were in control,” it said.

AllianceDBS Research said that having stayed between 1,648 and 1,676 for 4 market days, the benchmark index violated the 1,650 support level on Jan 11.

“The downside breakout simply indicated the presence of strong selling pressure in the game play with many market participants seen turning their market view to bearish.

“The stock liquidation we saw was believed to be an attempt to minimize market risk exposure given the unfilled downside gap left behind on Jan 4 and the inability on the part of benchmark index to keep is trading activity above the 1,650 level.

“Following the weak down close at 1,637.59, the market is expected to trade lower again with support zone between 1,620 and 1,627,” it said.

The research house said a fall below 1,620 could send the benchmark index down further to the subsequent support at 1,600.

It said that indicator wise, the MACD was below the 9-day moving average line.

“The analysis of overall market action on Jan 11 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,637.59 level on Jan 12,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include the following: Hua Yang Bhd, Tenaga Nasional Bhd, Malaysia Airports Holdings Bhd, Sasbadi Holdings Bhd, Dayang Enterprise Holdings Bhd, Ekovest Bhd, Sime Darby Bhd, AWC Bhd, Seacera Group Bhd, Berjaya Corporation Bhd and Kim Teck Cheong Consolidated Bhd.

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