KUALA LUMPUR (Feb 17): The FBM KLCI is expected to trend higher today in line with the overnight rally at most global markets.
Global equity markets rallied on Tuesday as investors engaged in bargain hunting and shrugged off a downturn in oil prices after hopes for an agreement among top producers to freeze output faded, according to Reuters.
After an extended holiday weekend, Wall Street financials, up 1.8%, and consumer discretionary stocks, up 2.5%, were among the best performing sectors on the session after showing some of the largest declines for the year, it said.
AllianceDBS Research in its evening edition Tuesday said despite the weak up close in the preceding day, the FBM KLCI had on Feb 16 opened the day on a positive note as market participants chose to play on the buying side.
The research house said under the persistent supportive buying interest, the market was in the green throughout the trading sessions before settling at the day's high of 1,664.99 (up 15.03 points or 0.91%).
"In the broader market, gainers outnumbered losers with 551 stocks ending higher and 303 stocks finishing lower. That gave a market breadth of 1.81 indicating the bulls were in control," it said.
AllianceDBS Research said the higher high on Feb 16 indicated that buyers were in better control over the sellers.
"A preliminary study of the market in the last 4 days revealed the intention on the part of certain market participants to protect its fort at 1,630 with an eye to break on the upside.
"The crossover of 50-day MA line on the back of higher market volume with a settlement at 1,664.99 on Feb 16 should pave the way for the market to move upward with immediate hurdle at 1,672.
"An upside breakout of 1,672 could send the market to the 1,700 psychological level. The market support is pegged at 1,648," it said.
The research house said a fall below 1,648 would put pressure on the benchmark index down to the subsequent support at 1,630.
It said that indicator wise, the MACD was above the nine-day moving average line.
"The analysis of overall market action on Feb 16 revealed that buying power was stronger than selling pressure.
"As such, the FBM KLCI would likely trade above the 1,664.99 level on Feb 17," said AllianceDBS Research.
Based on corporate announcements and news flow yesterday, companies likely to be in focus today include: Hartalega Holdings Bhd, UEM Sunrise Bhd, Bioalpha Holdings Bhd, PUC Founder (MSC) Bhd, Dialog Group Bhd, Hektar REIT, Suria Capital Holdings Bhd, TSR Capital Bhd and Barakah Offshore Petroleum Bhd.