KUALA LUMPUR (June 8): The FBM KLCI could trade flat today despite regional markets seen edging higher, as local investors may remain on the sideline after a bruising May.
The S&P 500 was trading near flat late Friday afternoon as optimism over further signs of recovery in the U.S. labor market was offset by increasing views the Federal Reserve could raise rates as early as September, according to Reuters.
Stronger-than-expected jobs data for May and a pickup in wages were the latest signs of better momentum in the economy, it said.
Overall, the FBM KLCI is expected to extend its consolidation mode this week as local equities are seen struggling to shrug off their heavy monthly losses in May.
Malaysian Assocciation of Technical Analyts president Datuk Dr Nazri Khan said that on the technical front, the previous week saw the FBM KLCI continue its sixth losing weekly streak, driven down by Telekom Malaysia Bhd and Tenaga Nasional Bhd due to news reported that there could be tariff cuts soon.
He said the FBM KLCI failed to break above 1,750 resistance level while several doji candlesticks appeared in the daily technical chart suggesting more downside ahead.
“With the concern over the uncertainty in Greece, uncertain ringgit and crude oil price underpinned by oversold reading from major oscillators, we believe the FBM KLCI is likely to continue its downtrend testing 1,700 support level over the next weekly session.
“Technology and Trading Service sector led Bursa stock market higher, although the battle with overhead resistance at 1750 has not yet been won,” he said.