KUALA LUMPUR (April 24): The FBM KLCI is expected to trend lower today on the back of still lacklustre investor sentiment and lack of fresh catalysts at the local bourse.
The much expected impetus from Invest Malaysia 2015 did not quite materialise as anticipated, exacerbated by the conspicious absence of 1Malaysia Development Board (1MDB) from the event.
U.S. stocks rose on Thursday, with the Nasdaq index hitting a record closing high, as corporate earnings and a rise in energy shares overshadowed soft U.S. economic data, while oil prices climbed to the highest levels of the year, according to Reuters.
The gains pushed the Nasdaq above a record set in March 2000, the height of the dot-com boom. The index is up 353 percent from its October 2002 low after the technology bubble burst, it said.
AllianceDBS Research in its evening edition Thursday said that dampened by the down close in the preceding day, the FBM KLCI had on April 23 traded lower to settle at the day’s low of 1,846.08 (-8.69, -0.47) as market participants continued to play on the selling side in anticipation of a lower market.
“In the broader market, losers outnumbered gainers with 480 stocks ending lower and 310 stocks finishing higher. That gave a market breadth of 0.64 indicating the bears were in control,” it said.
AllianceDBS Research said the lower low on April 23 indicated that sellers were in better control over the buyers.
The research house said given the weak down close on April 23, the benchmark index is expected to trade lower again with immediate support at 1,845.
“A fall below 1,845 could send the benchmark index down to the subsequent support zone, 1,835 – 1,840. The overhead resistance zone is pegged between 1,855 and 1,858,” it said.
The research house said that indicator wise, the MACD was below the 9-day moving average line.
“The analysis of overall market action on April 23 revealed that buying power was weaker than selling pressure.
“As such, the FBM KLCI would likely trade below the 1,846.08 level on April 24,” said AllianceDBS Research.