KUALA LUMPUR (Jan 10): The FBM KLCI could come under some selling pressure again today, in line with the mixed overnight close at Wall Street and the slip at European markets.

Oil prices fell on Monday on fears that record Iraqi crude exports and growing U.S. output could undermine OPEC's efforts to reduce supply, while sterling slumped on comments by British Prime Minister Theresa May suggesting what could be an aggressive exit from the European Union, according to Reuters.

Sterling was the big mover in the currency market, falling nearly 1 percent against the dollar to more than two-month lows after May's remarks. May said she was willing to sacrifice the country's single-market membership for more control over its borders, it said.

AllianceDBS Research in its evening edition Monday said the FBM KLCI had on Jan 9 opened the day on a firm note.

However, it said the benchmark index only traded marginally higher to 1,675.69 as market participants decided not to stage a stronger immediate follow through buying pressure.

The research house said that in the absence of strong buying interest, profit taking activity kicked in to push the market down to settle at the day’s low of 1,667.90 (down 7.59 points or 0.45%). 

“In the broader market, losers outnumbered gainers with 422 stocks ending lower and 375 stocks finishing higher. That gave a market breadth of 0.88 indicating the bears were in control,” it said.

AllianceDBS Research said the marginal higher high on Jan 9 suggested that market participants had chosen to adopt a conservative approach in their game play.

“This is believed to be attributed to the high risk low reward profile given the recent market rise with 35.5 points gain measuring from the low of 1,630 .67 (Jan 3) to 1,675.49 (Jan 6). “Moreover, the day’s high of 1,675.69 on Jan 9 was less than 5 points away from the 1,680 hurdle.

“Following the down close on Jan 9, the market is thus likely to come under profit taking pressure to go lower with immediate support at 1,665,” it said.

The research house said a fall below 1,665 could send the market down to 1,652.

However, it said a crossover of 1,680 would lift the market to the subsequent resistance zone, 1,690 – 1,700, adding that indicator wise, the MACD is above the 9-day moving average line.

“The analysis of overall market action on Jan 9 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,667.90 level on Jan 10,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, companies that may be in focus today could include: Hovid Bhd, HLT Global Bhd, Sumatec Resources Bhd, SapuraKencana Petroleum Bhd, GFM Services Bhd, Eurospan Holdings Bhd, Jaycorp Bhd, Sime Darby Bhd and Dataprep Holdings Bhd