KUALA LUMPUR (Oct 7): The FBM KLCI is expected to sustain its momentum and extend its gains today as investors’ buying interest is likely to keep the index above the 1,660-point level.

Crude oil surged 5 percent on Tuesday after the United States cut output forecasts, while global equity markets mostly rose on expectations the Fed will not raise interest rates this year, though Wall Street fell on slumping biotech stocks, according to Reuters.

News that non-OPEC producer Russia and key OPEC member Saudi Arabia discussed the oil market last week helped boost oil prices. The countries plan to continue exchanging views on demand, production and shale oil, Russian Energy Minister Alexander Novak told reporters, it said.

AllianceDBS Research in its evening edition Tuesday said that supported by the strong up close in the preceding day, the FBM KLCI had on Oct 6 gapped up to reach a high of 1,662.96 as market participants continued to play on the buying side in anticipation of a higher market.

The research house said that under the persistent buying interest, the benchmark index was in the green throughout the trading sessions before settling near the day’s high at 1,662.51 (up 14.92 points or 0.91%).

“In the broader market, gainers outnumbered losers with 495 stocks ending higher and 363 stocks finishing lower. That gave a market breadth of 1.36 indicating the bulls were in control,” it said.

AllianceDBS Research said that market participants were excited to play a buying game on Oct 6.

“This can be seen from the upside gap left behind.

“The excitement was believed to be owing to the crossover of the 50-day MA line on Oct 5, because it appeared to have helped in reviving the hope of seeing a sustainable upward movement after the recent failure to stay above the 50-day MA line for 3 consecutive days in September.

“Given the way this market carried itself over the past 5 days with 4 days of up close and only 1 day of down close, the benchmark index is in a position to test a higher level again with an immediate hurdle at 1,684,” it said.

The research house said a decisive crossover of 1,684 would see the benchmark index gearing towards the next resistance zone of 1,690 – 1,710, adding that indicator wise, the MACD was above the 9-day moving average line.

“The analysis of overall market action on Oct 6 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,662.96 level on Oct 7,” said AllianceDBS Research.