KUALA LUMPUR (Aug 18): The FBM KLCI is expected to trade sideways today in line with the modest overnight gains at most global markets and Wall Street.

Some bargain hunting activities may emerge after the local market has undergone some major batttering that saw it fall below the 1,600-point level.

World equity indexes advanced modestly on Monday as upbeat US housing data helped Wall Street shrug off a weak manufacturing report, while the prospect of higher US interest rates lifted the dollar for a third day, according to Reuters.

US equities rebounded as a report showed that US homebuilder sentiment rose in August to its highest level in nearly a decade, it said.

AllianceDBS Research in its evening edition Monday said dampened by the last Friday’s weak down close, the FBM KLCI had on August 17 opened the day on a negative note as market participants continued to play on the selling side in anticipation of a lower market.

The research house said that in the absence of strong supportive buying interest, the benchmark index fell to the lowest low of 1,569.19 since June 7, 2012 was in the red throughout the trading sessions before settling near the day’s low at 1,572.54 (-24.28 , -1.52%).

“In the broader market, losers outnumbered gainers with 836 stocks ending lower and 149 stocks finishing higher. That gave a market breadth of 0.17 indicating the bears were highly in control,” it said.

AllianceDBS Research said the benchmark index fell further on August 17 and remained well below last Friday’s settlement level on sustained selling activity.

The research house said sellers were clearly the dominant force in the game play as buyers were reluctant to establish stock positions for fear of more declines.

“This can be seen from the non-recovery of the benchmark index by the time market closed.

“Moreover, a study of the market patterns over the past 10 days showed that the large size of all the downward moves suggested that weakness could persist with an immediate support zone seen between 1,550 and 1,570.

“A fall below 1,550 could see the market moving towards the next support at 1,500,” it said.

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

“The analysis of overall market action on August 17 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,569.19 level on August 18,” said AllianceDBS Research.