KLCI to trade range bound, hurdle at 1,680

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KUALA LUMPUR (March 13): The FBM KLCI is expected to trade range bound today with immediate hurdle at 1,680.

A gauge of world equity markets rose and the dollar eased on Tuesday after a tame reading on U.S. inflation reinforced expectations the Federal Reserve will not raise interest rates anytime soon, while Boeing shares slid for a second day, according to Reuters.

U.S. consumer prices rose for the first time in four months in February but the modest pace of the increase resulted in the smallest annual gain in inflation in nearly 2-1/2 years, it said.

On Wall Street, the S&P 500 gained 8.22 points, or 0.30 percent, to 2,791.52 and the Nasdaq Composite added 32.97 points, or 0.44 percent, to 7,591.03. The Dow Jones Industrial Average fell 96.22 points, or 0.38 percent, to 25,554.66, dragged lower by slumping Boeing, said Reuters.

AllianceDBS Research in its evening edition Tuesday said the FBM KLCI had on March 12 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.

It said in the absence of stronger selling interest, the benchmark index was in the green throughout the trading sessions before settling near the day’s high at 1,671.28 (up 6.65 points or 0.40%).

“In the broader market, gainers outnumbered losers with 523 stocks ending higher and 346 stocks finishing lower. That gave a market breadth of 1.51 indicating the bulls were in better control,” it said.

AllianceDBS Research said the market saw no follow through selling interest on March 12 with the benchmark index taking a pause in spite of the sell down on March 11.

The research house said the return of market position above the 1,666 level on March 12 indicated that the one-day downside violation of 1,666 on March 11 was not significant and merely an over-reaction move by certain market participants.

“However, if the benchmark index were to trade below 1,666 for 3 consecutive days, this market would be deemed to have met the time filter criteria under the general rule of thumb.

“Moreover, the market had lost 66 points or 3.81% in 11 days measuring from the day’s high of 1,732.27 (22 February 2019) to the low of 1,664.63 registered on March 11,” it said.

The research house said following the up close on March 12, there should be buying attempt with immediate hurdle at 1,680.

“The analysis of overall market action on March 12 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,672.94 level on March 13,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: Berjaya Media Bhd, Ekovest Bhd, JCY International Bhd, KESM Industries Bhd, Matrix Concepts Holdings Bhd and T7 Global Bhd.