KLCI to snap losing streak, recover on bargain hunting

TheEdge Fri, May 19, 2017 05:43am - 6 years View Original


KUALA LUMPUR (May 19): The FBM KLCI is expected to snap its losing streak and rebound today on some bargain hunting in line with the overnight recovery at Wall Street.

Wall Street rebounded on Thursday from its biggest sell-off in more than eight months, helped by strong U.S. economic data, but uncertainty over U.S. President Donald Trump's agenda kept an index of global equity markets near a three-week low, according to Reuters.

The U.S. dollar reversed early losses against a basket of major currencies after stronger-than-expected U.S. economic data put the focus back on a widely anticipated increase in interest rates by the Federal Reserve, it said.

The Dow Jones Industrial Average rose 56.09 points, or 0.27 percent, to end at 20,663.02, the S&P 500 gained 8.69 points, or 0.37 percent, to finish at 2,365.72 and the Nasdaq Composite added 43.89 points, or 0.73 percent, to close at 6,055.13, said Reuters.

AllianceDBS Research in its evening edition Thursday said the FBM KLCI had on May 18 opened the day on a weak note with a downside gap.

It said the benchmark index subsequently traded down to a low of 1,762.04.

The research house said under the persistent selling interest, the benchmark index was in the red throughout the trading sessions before rebounding to settle near the day’s high at 1,767.17 (down 8.48 points or 0.48%).

“In the broader market, losers outnumbered gainers with 625 stocks ending lower and 317 stocks finishing higher. That gave a market breadth of 0.50 indicating the bears were in control,” it said.

AllianceDBS Research said the market witnessed a sell down on May 18 as market participants reacted strongly to the external negative market development.

It said the selling supply was overwhelming that aggressive sellers rushed to book the next available buyers in the line to get their selling orders down as soon as the first buying order was filled on opening bell.

“This can be seen from the downside gap which indicated the urgency on the part of market participants to unload stock positions.

“Under the influence of the external negative market development, many market participants were believed to have been forced to jump in to liquidate their stocks as market began to move lower,”it said.

It said this can be seen from the low of 1,762.04 on May 18.

The research house said following the off day’s low down close on May 18, there should be supportive buying interest with immediate support at 1,762.

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

“As such, the FBM KLCI would likely trade above the 1,769.80 level on May 19,” said AllianceDBS Research.

 Based on corporate announcements and news flow yesterday, companies in focus today may include: Petronas Dagangan Bhd, Press Metal Bhd, Tambun Indah Land Bhd, JCY International Bhd, Sarawak Plantation Bhd, Landmarks Bhd, Century Logistics Holdings Bhd, MHC Plantations Bhd, Tomypak Holdings Bhd and Silk Holdings Bhd. 

 

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