Tuesday 06 Jun 2023
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KUALA LUMPUR (July 9): The FBM KLCI is expected to consolidate further today in line with overnight slump at global markets.

The absence of the fresh catalysts at the local market would also be negative factor and keep the local index curbed.

World stock indexes fell and the yen jumped against the dollar on Wednesday on concerns over China's market turmoil and lingering worries over the future of Greece in the euro zone, according to Reuters.

U.S. stocks ended sharply lower, with investors also unnerved by a more than three-hour suspension in New York Stock Exchange trading. A technical glitch forced the halt, not a cyberattack, the exchange said, it said.

AllianceDBS Research in its evening edition Wednesday said the FBM KLCI had on July 8 gapped down to break below the 1,700 level as market participants continued to play on the selling side in anticipation of a lower market.

The research house said the benchmark index subsequently fell to a low of 1,693.35.

“Under the persistent selling interest, the benchmark index kept its position near the low end throughout the trading sessions before settling near the day’s low at 1,695.83 (- 16.47, - 0.96%).

“In the broader market, losers outnumbered gainers with 828 stocks ending lower and 117 stocks finishing higher. That gave a market breadth of 0.14 indicating the bears were in control,” it said.

AllianceDBS Research said the downside gap indicated the urgency to liquidate stock positions.

“Following the downside breakout of the 1,700 psychological level with a weak down close on July 8, the benchmark index has nearly erased all of the gains that chalked up on June 30 and Juky 1.

“This showed that many market participants were not convinced of the ability on the part of the benchmark index to go far up after registering only a marginal rise in the benchmark index on July 2 & 3.

“This sell-off should thus continue to put pressure on the market to trade lower with immediate support seen at 1,688. The hurdle is at 1,706,” it said.

The research house said that indicator wise, the MACD was still marginally above the 9-day moving average line.

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

“As such, the FBM KLCI would likely trade below the 1,693.35 level on July 9,” said AllianceDBS Research.


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