KLCI to remain lacklustre, immediate hurdle at 1,650

TheEdge Wed, Dec 19, 2018 05:40am - 5 years View Original


KUALA LUMPUR (Dec 19): The FBM KLCI is expected to remain lacklustre today as global markets stayed lower overnight.

Local investors will likely be sitting on the sidelines to wait it out, as most research analysts have in the past few days painted an ominous picture for the domestic stock market.

Yesterday, the World Bank lowered its projection for Malaysia’s economic growth in 2018 to 4.7%, which will not augur too well on the already frail investor sentiment.

Global equity markets turned lower late on Tuesday as nervous investors awaited indications whether the U.S. Federal Reserve will be able to raise interest rates much further amid turbulent markets and a weakening outlook for the global economy, according to Reuters.

Energy stocks weighed on the U.S. market as oil price declines deepened, it said.

AllianceDBS Research in its evening edition yesterday said that dampened by the down close in the preceding, the FBM KLCI had on Dec 18 fallen to a low of 1,626.93 as market participants continued to play on the selling side in anticipation of a lower market.

It said under the persistent selling interest, the benchmark index was in the red throughout most of the trading sessions before settling at 1,635.31 (down 6.31 points or 0.38%).

“In the broader market, losers outnumbered gainers with 699 stocks ending lower and 222 stocks finishing higher. That gave a market breadth of 0.31 indicating the bears were in control,” it said.

AllianceDBS Research said the market saw selling activity on Dec 18 with the benchmark index reaching a low of 1,626.93.

It said the lower low did not come as a surprise because many market participants were concerned about the market development after the downside breakout of the 1,650 level on Dec 17.

“This concern turned into anxiety which can be seen from the opening level of 1,628.47 that was close to the day’s low of 1,626.93.

“This suggested a weak follow through selling pressure soon after the opening bell.

“At the day’s low of 1,626.93, market participants were seen unwilling to be aggressive in their selling game because market had lost 51 points in 3 days measuring from the high of 1,677.91 (Dec 13) to the low of 1,626.93 (Dec 18),” it said.

The research house said following the off day’s low down close on Dec 18, there should be buying attempt with immediate hurdle at 1,650.

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

“As such, FBMKLCI would likely trade above the 1,643.88 level on Dec 19,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies in focus today may include: FGV Holdings Bhd, Telekom Malaysia Bhd, Malayan Banking Bhd, CIMB Group Holdings Bhd, Malaysia Airports Holdings Bhd, Transocean Holdings Bhd, Crescendo Corp Bhd, Comfort Gloves Bhd, Lotte Chemical Titan Holding Bhd and Prestariang Bhd.

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