Saturday 03 Jun 2023
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KUALA LUMPUR (July 10): The FBM KLCI is expected to end the week on a positive note today in line with the overnight uptrend at most global markets.

World equity markets snapped a five-day sell-off and safe-haven assets like bonds, the Swiss franc and yen fell on Thursday as Beijing regulators halted a rout in Chinese stocks and Europe revived hopes Greece could be kept in the euro currency union, according to Reuters.

Shares on Wall Street initially rebounded about 1%, having been dragged into the red for the year on Wednesday by the China crash, cliff-hanger talks on Greece and a benign yet unsettling glitch on the New York Stock Exchange, it said.

AllianceDBS Research in its evening edition Thursday said that dampened by the weak down close in the preceding day, the FBM KLCI had on July 9 traded lower to a low of 1,685.03 as market participants continued to play on the selling side in anticipation of a lower market.

The research house, however, said the inability of the benchmark index to go lower than 1,685.03 saw the emergence of supportive buying interest.

It said this pulled the benchmark index back up to a high of 1,704.88 before settling at 1,701.54 (+5.71, +0.34%).

“In the broader market, gainers outnumbered losers with 557 stocks ending higher and 271 stocks finishing lower. That gave a market breadth of 2.05 indicating the bulls were in control,” it said.

AllianceDBS Research said the benchmark index witnessed follow through selling pressure on July 9.

However, it said the benchmark index did not go far down below the 1,688 support after the weak opening level.

“This gave a chance to the risk taking buyers to establish stock positions at a lower level.

“Following the rebound with an up close at 1,701.54 on July 9, certain market participants apparently were seen unwilling to see the benchmark index keeping its position near to the 1,688 level in an attempt to avert another immediate potential sell off.

“Given what happened in the last 2 days, the market is expected to trade between 1,685 and 1,706 in the coming few days. A fall below 1,685 could send the benchmark index down to the subsequent support zone, 1,660 – 1,670,” it said.  

The research house said that conversely, a crossover of 1,706 would see the market moving towards the next hurdle at 1,714.

It said that indicator wise, the MACD was still staying marginally above the 9-day moving average line.

“The analysis of overall market action on July 9 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,702.72 level on July 10,” said AllianceDBS Research.


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