KUALA LUMPUR (Feb 16): The FBM KLCI is expected to trade range bound today despite the strong overnight gains at most global markets as sentiment among local investors remains wary.

World stocks rose sharply on Monday as China's central bank fixed the yuan at a much stronger rate and oil cemented recent gains, easing fears of global deflation, according to Reuters.

The rally belied a string of poor economic data from Beijing and Tokyo as demand for safe-haven assets waned, yet investors remained on edge due to lingering concerns about growth and the health of the financial sector, it said.

AllianceDBS Research in its evening edition Monday said the FBM KLCI had on Feb 15 opened the day on a positive note.

It said the benchmark index subsequently traded to a high of 1,661.34 as market participants continued to play on the buying side.

It said under the persistent supportive buying interest, the benchmark index was in the green throughout the trading sessions before profit taking activity pushed the index down to settle near the day’s low at 1,649.96 (up 6.22 points or 0.38%).

“In the broader market, gainers outnumbered losers with 497 stocks ending higher and 297 stocks finishing lower. That gave a market breadth of 1.67 indicating the bulls were in control,” it said.  

AllianceDBS Research said the higher high on Feb 15 may have indicated that buyers were in better control over the sellers.

“However, many market participants were unwilling to hold onto buying positions.

“This can be seen from the near day’s low settlement at 1,649.96 after registering a high of 1,661.34.

“Given what happened on Feb 15, the market is expected to move between 1,630 and 1,672 for a little while.

The research house said a crossover of 1,672 should place the market in a good position to test the 1,700 psychological level.

“However, a market reversal to break below 1,630 could send the index down the subsequent support zone, 1,609 – 1,618,” 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 Feb 15 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,648.46 level on Feb 16,” it said.

Based on corporate announcements and news flow yesterday, companies likely to be in focus today include AirAsia Bhd, AirAsia X Bhd, AWC Bhd, Tek Seng Holdings Bhd, TSR Capital Bhd, Kejuruteraan Samudra Timur Bhd, BP Plastics Holdings Bhd and Pharmaniaga Holdings Bhd.