KUALA LUMPUR (June 22): The FBM KLCI is expected to trade range-bound today amidst global equity fears of a Greek debt default at the end of this month.
Worries that Greece is edging toward default on its debt drove investors into safe-haven assets last Friday, pushing the dollar and U.S. Treasury prices up and causing a gauge of global equity markets to retreat, according to Reuters.
Trading in European markets remained calm as investors hoped an emergency meeting of euro zone leaders next week will keep Greece from defaulting at the end of the month on 1.6 billion euros in debt owed to the International Monetary Fund, it said.
AllianceDBS Research in its evening edition last Friday said despite the weak down close in the preceding day, the FBM KLCI had on June 19 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through selling pressure.
The research house said that in the absence of stronger selling interest, the benchmark index climbed back up to settle at 1,721.77 (+ 3.65, + 0.21%) ahead of weekend.
“In the broader market, gainers outnumbered losers with 489 stocks ending higher and 299 stocks finishing lower. That gave a market breadth of 1.63 indicating the bulls were in control,” it said.
AllianceDBS Research said the inside day bar indicated a breather in the game play.
It said the positive settlement above the 1,718 level in the last 2 days was encouraging, because sellers were seen not “interested” to push the benchmark index much below the 1,718 level at this juncture after losing 153 points over the past 37 days.
“Because the benchmark index is only 14 points away from the 1,700 psychological level (1,714 on June 18 minus 1,700). “Following the up close, market is once again seen making a comeback to consolidate its position between 1,714 and 1,745, but the benchmark index must first overcome the small resistance selling zone between 1,727 and 1,733,” it said.
The research house said that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on June 19 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,726.98 level on June 22,” said AllianceDBS Research.