Global rally to boost KLCI, immediate support at 1,685

Global rally to boost KLCI, immediate support at 1,685
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KUALA LUMPUR (Dec 4): The FBM KLCI is expected to trend higher today and cross the 1,700-point level, immediate support at 1,685, riding on the overnight rally at most global markets.

A truce in the U.S.-China trade war boosted global stocks to their highest in roughly three weeks on Monday, while sending the dollar lower and the Chinese yuan and several trade-dependent currencies higher, according to Reuters.

The rally in equities follows an agreement between Washington and Beijing at the G20 summit in Argentina on Saturday that calls for a 90-day trade tariff truce. Oil prices jumped more than 3 percent, it said.

The Dow Jones Industrial Average rose 243.98 points, or 0.96 percent, to 25,782.44, the S&P 500 gained 25.02 points, or 0.91 percent, to 2,785.19 and the Nasdaq Composite added 88.86 points, or 1.21 percent, to 7,419.40, said Reuters.

AllianceDBS Research in its evening edition Dec 3 said the FBM KLCI had on Dec 3 formed an inside day bar.

It said under the persistent buying interest, the benchmark index was in the green throughout the trading sessions before settling near the day’s high at 1,699.72 (up 19.86 points or 1.18%).

“In the broader market, gainers outnumbered losers with 568 stocks ending higher and 338 stocks finishing lower. That gave a market breadth of 1.68 indicating the bulls were in better control,” it said.

AllianceDBS Research said the inside day bar indicated a pause in the game play with buyers and sellers seen in a balanced position.

It said with the near day’s low close on Nov 30, the market was indeed in a good position to trade lower again in the subsequent day.

“However, a buying attempt with an opening level of 5.88 points higher than last Friday’s close of 1,679.86 was initiated on Dec 3 in a hope to pull up the benchmark index from the immediate risk of another sell down.

“Fortunately, the positive opening level attracted supportive buying interest which subsequently lifted the benchmark index into the 1,700 zone on an intraday basis.

“An examination of the way this market carried itself on Nov 30 & Dec 3 revealed that buyers and sellers were battling for control of the game with benchmark index now likely to move between 1,677 and 1,703 in the coming few days,” it said.

The research house said following the up close on Dec 3, there should be buying attempt with immediate support at 1,685.

“The analysis of overall market action on Dec 3 revealed that buying power was stronger than selling pressure.

“As such, the FBM KLCI would likely trade above the 1,700.67 level on Dec 4,” said AllianceDBS Research.

Based on corporate announcements and news flows yesterday, stocks in focus today may include: Cycle & Carriage Bintang Bhd, Telekom Malaysia Bhd, Reach Energy Bhd, Revenue Group Bhd, Genting Malaysia Bhd, Hap Seng Consolidated Bhd, Signature International Bhd, Hovid Bhd and D’nonce Technology Bhd.