Thursday 28 Mar 2024
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KUALA LUMPUR (Oct 5): The FBM KLCI is expected to trend lower today despite the sharp close up at Wall Street as local investors appear to remain on the sideline and not follow up with any buying support.

Bond prices climbed on Friday after a weak U.S. employment report increased worry about slowing global growth, while global equities were able to rebound from an initial selloff to close with strong gains, according to Reuters.

The economy created 142,000 jobs in September, well short of the 203,000 forecast, and August numbers were revised sharply lower to show only 136,000 jobs, the U.S. Labor Department said, it said.

Meanwhile, the global market volatility of the past month that sent U.S. stocks to their worst quarter in four years shows no signs of letting up just because the calendar turned to October, said Reuters.

AllianceDBS Research in its evening edition last Friday said despite the strong up close in the preceding day, the FBM KLCI had on Oct 2 traded within previous day’s range to form an inside day bar as market participants decided not to stage an immediate follow through buying support.

The research house said that in the absence of stronger buying interest, the benchmark index was in the red throughout the trading sessions before settling off the day’s low at 1,628.80 (- 5.13, - 0.31%) ahead of weekend.

“In the broader market, gainers outnumbered losers with 397 stocks ending higher and 364 stocks finishing lower. That gave a market breadth of 1.09 indicating the bulls were in control with the bears closely matched,” it said.

AllianceDBS Research said that having recouped 40 points (1,635 on 1 Oct 2015 minus 1,595) or 41.6% of the earlier lost ground measuring from the high of 1,691 (17 Sep 2015) to the low of 1,595 (29 Sep2015), the market took a pause on 2 Oct 2015 as market participants reluctant to buy into the market for fear of carrying to many stock positions over the weekend.

“The higher high on 30 Sep & 1 Oct 2015 have placed the benchmark index in a good position to gear upward with immediate hurdle seen at 1,640, however a conservative game play approach was adopted on 2 Oct 2015.

“A crossover of 1,640 could see the market gearing towards 1,662,” it said.

The research house said that however, a fall back below 1,626 would put pressure on the market back down to the subsequent support at 1,617, adding that indicator wise, the MACD was above the 9-day moving average line.

“The analysis of overall market action on Oct 2 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,620.58 level on Oct 5,” said AllianceDBS Research.

 

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