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KLCI to stay tepid on lack of fresh catalysts, support seen at 1,740

TheEdge Thu, Nov 02, 2017 - 1 year ago


KUALA LUMPUR (Nov 2): The FBM KLCI is expected continue on its weaker trajectory today with support seen at 1,740 points, as sentiment at the local course stays tepid due to a lack of fresh catalysts.

World stock markets climbed to a fresh high on Wednesday, boosted by solid corporate earnings, while the dollar strengthened after the Federal Reserve held interest rates steady and solid economic data, according to Reuters.

The Federal Reserve kept rates unchanged on Wednesday and pointed to solid U.S. economic growth and a strengthening labor market while downplaying the impact of recent hurricanes, a sign it is on track to lift borrowing costs again in December. Traders put the chance of a rate hike next month at 86.3 percent, according to Thomson Reuters data, it said.

The Dow Jones Industrial Average rose 57.77 points, or 0.25 percent, to 23,435.01, the S&P 500 gained 4.1 points, or 0.16 percent, to 2,579.36 and the Nasdaq Composite dropped 11.14 points, or 0.17 percent, to 6,716.53, said Reuters.

AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on Nov 1 opened the day on a firm note.

However, it said non-follow through buying support in the area of 1,748.80 prompted renewed selling pressure to chip in.

It said this pushed the benchmark index down to a low of 1,742.35 before settling near the day’s low at 1,743.93 (down 3.99 points or 0.23%).

“In the broader market, losers outnumbered gainers with 504 stocks ending lower and 368 stocks finishing higher. That gave a market breadth of 0.73 indicating the bears were in control,” it said.

AllianceDBS Research said the market saw selling activity on the first day of November 2017 with the benchmark index falling to a low of 1,742.35.

“A buying attempt was made on the opening bell on Nov 1, but there was no follow through buying support to carry the market far up.

“The inability on the part of the benchmark index to go higher than 1,748.80 prompted some of the market participants who had earlier chosen not to play on the selling side to change their game play pattern to selling.

“Given a choice to trade in the market, it was in fact natural for market participants to play a selling game in the absence of positive news flow after registering 2 consecutive days of up close,” it said.

The research house said following the down close on Nov 1, there should be selling attempt again with immediate support at 1,740.

“The analysis of overall market action on Nov 1 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,742.35 level on Nov 2,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, stocks in focus today may include: Berjaya Corp Bhd, Axis REIT, Eden Inc Bhd, T7 Global Bhd, Unisem (M) Bhd, Theta Edge Bhd and Jiankun International Bhd.

 








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