KLCI seen trending lower as bearish sentiment prevails, support at 1844

KUALA LUMPUR (March 15): The FBM KLCI is seen trending lower today, in line with the overnight fall at most global markets as a global trade war fear rattled investors, with support seen at the 1,844-point level.

Simmering political tensions roiled stocks and bonds across the globe on Wednesday, with U.S. yield curves continuing to flatten and stock markets closing in the red as industrial companies took a beating, according to Reuters.

Despite strong economic data out of China and the United States this week, markets struggled to shake a hangover from news that U.S. President Donald Trump was looking to impose tariffs on up to $60 billion of Chinese imports, it said.

On Wednesday, a White House spokeswoman said the Trump administration is pressing China to cut its trade surplus with the United States by $100 billion.

The Dow Jones Industrial Average fell 248.91 points, or 1 percent, to end at 24,758.12, the S&P 500 lost 15.83 points, or 0.57 percent, to 2,749.48 and the Nasdaq Composite dropped 14.20 points, or 0.19 percent, to 7,496.81, said Reuters.

AllianceDBS Research in its evening edition Wednesday said despite the near day’s high up close in the preceding day, the FBM KLCI had on March 14 traded within previous day’s range to form an inside day bar as market participants chose to play a conservative game.

It said in the absence of stronger buying interest, the benchmark index was in the red throughout the trading sessions before settling at 1,857.06 (down 6.97 points or 0.37%).

“In the broader market, losers outnumbered gainers with 635 stocks ending lower and 332 stocks finishing higher. That gave a market breadth of 0.52 indicating the bears were in control,” it said.

AllianceDBS Research said the inside day bar indicated a breather in the game play with both buyers and sellers seen in a balanced position.

“The market may have been well placed to test higher level on 14 Mar 2018 given the near day’s high up close on March 13, but market participants apparently were unwilling to make a greater commitment on the buying side as the last few minutes buying of selective blue chip stocks on March 13 to settle the benchmark index marginally above the 1,863 hurdle did not reflect the real market strength.

“With no follow through buying interest to sustain the market position above the 1,863 level, market participants with winning positions had decided to lock in a portion of their trading gains.

“This pushed the benchmark index down to 1,855.14,” it said.

The research house said judging from the way this market carried itself over the past 3 days, the benchmark index is believed to be consolidating for an upward move as long as the upside gap left behind on March 12 is not filled.

It said following the down close on March 14, there should be selling attempt with immediate support at 1,844. 

“The analysis of overall market action on March 14 revealed that buying power was weaker than selling pressure.

“As such, the FBM KLCI would likely trade below the 1,855.14 level on March 15,” said AllianceDBS Research.

Based on corporate announcements and news flow yesterday, stocks in focus today may include Glomac Bhd, MK Land Holdings Bhd, JAKS Resources Bhd, V.S. Industry Bhd, T7 Global Bhd, YFG Bhd, Malaysia Airports Holdings Bhd and Denko Industrial Corp Bhd.

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