KLCI to start week on lacklustre note, remain below 1,730

TheEdge Mon, Dec 11, 2017 05:33am - 6 years View Original


KUALA LUMPUR (Dec 11): The FBM KLCI is expected to start the week on a lacklustre note and remain below the 1,730-level, despite the gains last Friday at most global markets, as buying sentiment at the local bourse stays tepid.

Wall Street and other major global stock markets posted solid gains on Friday and the U.S. dollar rose for a fifth straight day after data showed robust U.S. job growth, according to Reuters.

The pan-European FTSEurofirst 300 index rose 0.74 percent, supported by news that Britain and the European Union had a breakthrough in Brexit negotiations, it said.

The Dow Jones Industrial Average rose 117.68 points, or 0.49 percent, to 24,329.16, the S&P 500 gained 14.52 points, or 0.55 percent, to 2,651.5 and the Nasdaq Composite added 27.24 points, or 0.4 percent, to 6,840.08, said Reuters.

AllianceDBS Research in its evening edition last Friday said despite the weak up close in the preceding day, the FBM KLCI had on Dec 8 traded marginally higher to 1,724.59 as market participants chose to play on the buying side in anticipation of a higher market.

It said in the absence of stronger selling interest, the benchmark index was in the green throughout most of the trading sessions before settling at 1,721.25 (up 2.20 points or 0.13%).

“In the broader market, losers outnumbered gainers with 490 stocks ending lower and 327 stocks finishing higher. That gave a market breadth of 0.66 indicating the bears were in better control,” it said.

AllianceDBS Research said the market made a higher high on Dec 8 with the benchmark index reaching a day’s high of 1,724.59 as market participants were once again choosing to be conservative in their selling game.

“A conservative selling game is very much needed for the overall market development given the high degree of significance of 1,713.

“The ability to hold the market above 1,713 would certainly help to contain the market sentiment from deteriorating especially after the recent selling attempts below the 1,713 level was believed to have initiated with an intention to trigger a market sell-off.

“The return of the benchmark index above the 1,713 level helped to explain why there was a supportive market buying play to pull the benchmark index back up above the 1,713 level on a close basis from the low of 1,708.48 on Dec 5,” it said.

The research house said while a small trading platform may have been seen in the making, but market participants were believed to be still watching the market closely when there is still fear of another market selloff.

It said following the weak up close on Dec 8, there should be selling attempt.   

“The analysis of overall market action on Dec 8 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,718.88 level on Dec 11,” said AllianceDBS Research.

Based on corporate announcements and news flow last Friday, stocks in focus today may include: AirAsia Bhd, Fiamma Holdings Bhd, Bermaz Auto Bhd, CCM Duopharma Biotech Bhd, JKG Land Bhd, Tenaga Nasional Bhd, WCT Holdings Bhd, ManagePay Systems Bhd and Malayan United Industries Bhd.

 

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