Sunday 04 Jun 2023
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KUALA LUMPUR (April 3): The FBM KLCI is expected to trend higher today and the week on a positive note, in line with the higher overnight at Wall Street and most global markets.

U.S. stocks climbed on Thursday after two sessions of losses, as a fall in jobless claims raised optimism ahead of a key payrolls report, while oil tumbled on fears of worsening oversupply if sanctions over Iran's nuclear program are dropped, according to Reuters.

Data showing an unexpected fall in the number of Americans filing new claims for unemployment benefits boosted sentiment before the U.S. Labor Department's nonfarm payrolls report for March, which will be released on the Good Friday holiday, it said.

Market focus will shift from macro to micro next week as economic data winds down and quarterly earnings reports from S&P 500 components including Alcoa take center-stage, said Reuters.

AllianceDBS Research in its evening edition Thursday said despite the weak down close in the preceding day, the FBM KLCI had on April 2 traded higher to 1,832.37 as market participants chose to play on the buying side. In the absence of strong selling interest, the benchmark index was in the green throughout the trading sessions before settling near the day’s high at 1,831.97 (+5.66, +0.31%).

“In the broader market, gainers outnumbered losers with 466 stocks ending higher and 326 stocks finishing lower. That gave a market breadth of 1.42 indicating the bulls were in control,” it said.

AllianceDBS Research said the higher high and higher low on April 2 indicated that buyers were in better control over the sellers.

It said given what had happened on April 2, it seemed that the sell down on April 1 was a deliberate attempt taken by certain market participants to gauge the availability of selling pressure in the market below the 1,830 level.

“Following the return of the benchmark index above the 1,830 on April 2, we see further advance with next overhead resistance pegged at 1,846.

“However, the market support is at 1,826. A fall below 1,826 could send the market down to the subsequent support at 1,812,” it said.

Indicator wise, the MACD is above the 9-day moving average line, it said.

“The analysis of overall market action on April 2 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,832.37 level on April 3,” said AllianceDBS Research.

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