KUALA LUMPUR (July 3): The FBM KLCI is expected to end the week on a positive note above the 1,730-point level, on sustained positive momentum.
The U.S. dollar index fell from a three-week high on Thursday as a weaker than expected U.S. payrolls report lowered chances of a U.S. interest rate hike come September, while Wall Street and world stock markets ended little changed after a volatile week, according to Reuters.
Bank shares were hit the most in New York on the expectation of lower rates for longer, while utilities, favored when Treasuries yield relatively low rates, outperformed, it said.
AllianceDBS Research in its evening edition Thursday said the FBM KLCI had on July 2 opened in green and traded marginally higher to 1,738.67 as some market continued to play on the buying side in anticipation of a higher market.
The research house said that in the absence of stronger selling interest, the benchmark index kept its position near the high end throughout most of the trading sessions before settling at 1,733.88 (up 5.92 points or 0.34%).
“In the broader market, losers outnumbered gainers with 429 stocks ending lower and 349 stocks finishing higher. That gave a market breadth of 0.81 indicating the bears were in control,” it said.
AllianceDBS Research said the market traded marginally higher on July 2 after the strong rally in the previous 2 days (June 30 & July 1).
The research house said that was good enough for the benchmark index to regain its position above the 20-day MA line since April 29.
“This should pave the way for the benchmark index to trade higher again in the coming few days.
“However, the hurdle remains at 1,735.
“A crossover of 1,735 on a close basis could lift the market towards the subsequent resistance zone of 1,745 and 1,760,” it said.
AllianceDBS Research said the support zone was pegged between 1,714 and 1,706, adding that indicator wise, the MACD was above the 9-day moving average line.
“The analysis of overall market action on July 2 revealed that buying power was stronger than selling pressure.
“As such, the FBM KLCI would likely trade above the 1,738.67 level on July 3,” said AllianceDBS Research.