KUALA LUMPUR (Oct 6): The FBM KLCI is expected to trend higher today and eye the 1,650-point level in line with the firmer overnight close at Wall Street and most global markets.
Oil prices jumped after Russia said it was ready to meet with other producers to discuss the market, while world stock indexes rose with commodity-related shares amid a backdrop of low global interest rates, according to Reuters.
The S&P 500 rose for a fifth straight session for the first time this year, helped by increases of more than 2 percent in S&P's energy, materials and industrials indexes, it said.
AllianceDBS Research in its evening edition Monday said despite last Friday’s down close, the FBM KLCI had on Oct 5 opened the day on a positive note.
It said the benchmark index subsequently crossed over the 1,640 hurdle to settle at the day’s high of 1,647.59 (up 18.79 points or 1.15%) as market participants decided to change their game play pattern from selling to buying in anticipation of a higher market..
“In the broader market, gainers outnumbered losers with 601 stocks ending higher and 236 stocks finishing lower. That gave a market breadth of 2.54 indicating the bulls were in control,” it said.
AllianceDBS Research said the crossover of 1,640 on Oct 5 was encouraging as it was accompanied by higher market volume.
“This suggested that market participants were more willing to take the risk on the buying side compared to last Friday.
“Following the up close at 1,647.59, the benchmark index is seen poised to gear upward again with an eye to test the next resistance at 1,660.
“Moreover, the market has managed to climb back up above the 50-day MA line again with support seen at 1,635 after spending 2 days between the 20-day and 50-day MA lines,” it said, adding that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on Oct 5 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,647.59 level on Oct 6,” said AllianceDBS Research.