Friday 29 Mar 2024
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KUALA LUMPUR (Aug 19): The FBM KLCI is expected to trend sideways today on bargain hunting activities at the local bourse despite the overnight retreat at US and Chinese stock markets.

A 6% tumble in Chinese shares on Tuesday and disappointing earnings from Wal-Mart dented US equities while copper and oil prices touched multi-year lows, according to Reuters.

Wal-Mart Stores Inc fell 3.2% to $69.63 as the biggest drag on the Dow after the major retailer reported weaker-than-expected quarterly earnings and lowered its full-year forecast, it said.

AllianceDBS Research in its evening edition Tuesday said the FBM KLCI had on August 18 traded lower to 1,562.88 as market participants continued to play on the selling side in anticipation of a lower market.

However, the research house said weak follow through selling pressure in the area of 1,562.88 prompted risk buying interest to chip in.

It said this lifted the benchmark index to 1,584.05 before settling near the day’s high at 1,579.60 (+7.06, +0.45%).

“In the broader market, gainers outnumbered losers with 409 stocks ending higher and 407 stocks finishing lower. That gave a market breadth of 1.005 indicating the bulls and bears were quite equally matched,” it said.

AllianceDBS Research said the benchmark index traded in a negative territory after opening the day on a positive note, but it managed to climb back up to reach a high of 1,584.05 on August 18.

“This indicated the presence of stronger buying demand than the selling supply.

“The near day’s high settlement was encouraging for it indicated a change of game play pattern after the recent sell-off which pushed the market down from the high of 1,744 (August 8) to the low of 1,562 (August 18).

“Nonetheless, the buying pressure on August 18 was believed to be more of a short term in nature with an objective to go for a quick kill in view of the market loss of 182 points over the past 11 days,” it said.

AllianceDBS Research said the hurdle was at 1,600 with support zone pegged between 1,550 and 1,570.

It said that indicator wise, the MACD was below the 9-day moving average line.

“The analysis of overall market action on August 18 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,584.05 level on August 19,” said AllianceDBS Research.

 

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