KLCI to trend higher on bargain hunting, window dressing

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KUALA LUMPUR (Dec 30): The FBM KLCI could trend higher on the penultimate trading day of 2014, on bargain hunting and window dressing activities.

The sentiment at the local market could also receive a boost by the higher overnight close at most global markets.

The only likely blemish at the local market could be some negative sentiment toward low cost carrier AirAsia Bhd that has run into some turbulence after an aircraft belonging to its Indonesian affiliate went missing since Sunday morning.

AirAsia was the most actively traded counter on Monday.

Globally, shares edged higher in major markets and Greek debt yields rallied on Monday after the parliament in Athens rejected the government's presidential candidate, while crude prices tumbled after a short-lived bounce, according to Reuters.

On Wall Street, however, the S&P 500 hit yet another intraday record high, boosted by gains in utilities, consumer and bank stocks.

U.S. stocks were little changed in a quiet session on Monday as a decline in oil prices weighed on the energy sector, although the S&P 500 was on track to notch yet another record high, said Reuters.

However, trading volume at the local market could be light in view of many retail investors likely having taken the year end holidays.

Hong Leong IB Research in a market preview Tuesday said that overall, the market is likely to remain choppy (induced by thin volume in a subdued market) due to profit taking consolidation and a 5-year low in crude oil prices, which could reignite concerns about government budget balance and trade balance which will add downward pressure to the ringgit and GDP growth, prior to the GST implementation in Apr 2015.

“Weekly supports are situated at 1725-1743 while resistance is near 1784 levels,” it said.